Prime Minister Girija Prasad Koirala, Nepal's first democratically elected leader in three decades, resigned Sunday after losing a vote in Parliament.
His resignation set the stage for new parliamentary elections that will test the 3-year-old democracy.
The political crisis was rooted in factional fighting within the governing Nepali Congress Party, but it also reflected frustration with Koirala's failure to make headway against Nepal's poverty, illiteracy and underdevelopment.
Koirala, 70, submitted his resignation to King Birendra after members of his party helped vote down the government's annual policy statement. The prime minister recommended that Parliament be dissolved and elections held Nov. 13. A general election had not been due until 1996.
There was no immediate statement from the palace.
Koirala came to power in 1991 in this Himalayan kingdom's first multi-party elections in 30 years after street demonstrations forced Birendra to become a constitutional monarch.
Though he took some measures to modernize and liberalize the economy, Nepal remains one of the world's poorest countries, with a per capita income of $180 and an infant mortality rate of nearly one in 10. Nearly three people in four cannot read or write.
The opposition Communists accuse Koirala's government of complicity in the deaths of two of its most charismatic leaders in a car accident in May, 1993.
The motion Sunday lost 86 to 74 in the 205-seat lower house when 36 Nepali Congress Party members abstained.