Nepal's Prime Minister Jhalanath Khanal has stepped down, admitting he is unable to make progress in forging a political consensus in the country.
Mr Khanal submitted his resignation letter to the president after talks with other party leaders collapsed, his press adviser said.
The government and the opposition have failed to agree on a new constitution after 10 years of civil war.
One of the key sticking points has been the fate of former Maoist fighters.
New crisis fears
Mr Khanal submitted his resignation letter to President Ram Baran Yadav late on Sunday, his press adviser Surya Thapa said.
"He tried to forge a consensus until the last minute. But the parties failed to agree on the constitution drafting and the peace process, so he has resigned," the adviser told the AFP news agency.
The move ends Mr Khanal's six-and-half-month stint as prime minister.
It also comes barely three weeks before the extended term of Nepal's constituent assembly, which doubles as parliament, expires on 31 August, the BBC's Surendra Phuyal in Kathmandu reports.
Mr Khanal had vowed to resign as premier if he failed to make consensus on completing the peace process, chiefly the integration and rehabilitation of the 19,000 Maoist ex-combatants.
He was the third prime minister after Nepal's organised elections to the constituent assembly in May 2008.
It is unclear who will succeed him as the country's political parties are busy with internal and inter-party negotiations, our correspondent says.
The parties also pledged to prepare the preliminary draft of the constitution and complete the basic tasks of the peace process by the end of August.
But with two weeks to go until the big day, the parties are far from any agreement. If they fail to reach a consensus, Mr Khanal's resignation could plunge the country into a new phase of crisis, our correspondent says.