Prime Minister Baburam Bhattarai, a former Maoist rebel leader, announced at a rally of 10,000 people on Wednesday that elections, earlier scheduled for last November, would be held in May to elect a special assembly to draw up a new constitution for the young Himalayan republic.
"It is just a bluff," Madhav Kumar Nepal, a former prime minister and a senior leader of the opposition Communist UML party, said of the election call.
"It is a caretaker government; there are serious questions about its legitimacy. How can it hold the election?" Nepal told Reuters.
The aid and tourism dependent country has been in political limbo for months.
Differences among politicians over issues including the distribution of power and resources to states under a planned federal system resulted in the dissolution of parliament in May last year. A new assembly is needed to complete a draft constitution.
But opposition parties are calling for Bhattarai's resignation, saying he had already failed to hold elections once.
They want a national unity government to oversee a vote and have organised protests to ratchet up pressure for the leader to quit. Dozens of people have been injured in the protests and activists recently stoned Bhattarai's car to stop him from attending a party meeting in the west of the country.
More protests are planned for next week.
"Street protest is a must. Great achievements of the democratic system were received through street protests in the past and it is possible now as well," UML leader Jhalnath Khanal said, news service thehimalayantimes.com reported.
The ruling party says opposition parties are afraid of facing the voters because they fear losing.
Politicians are under pressure from donors to hold the election early and establish accountability in one of the world's poorest countries.
Analysts say chances of holding elections in the middle of the year are diminishing as the deadlock is delaying redrawing the constituencies and updating the voters' list. The next window for a vote is November this year or the spring of 2014.
Ordinary people enduring daily power cuts of up to 14 hours, shortages of fuel, unemployment and near-double digit inflation think feuding politicians do not care about their plight.
"They have no concern for us. They are power hungry and selfish," said Jagat Pokharel, a 25-year-old college student. — Reuters