This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001055 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - RIEDEL 
 
E.O. 12958: DECL: 05/27/2012 
TAGS: PGOV NP GON
SUBJECT: NEPALI CONGRESS PARTY REVOKES PM'S MEMBERSHIP; 
EMERGENCY EXTENDED 
 
REF: A. (A) KATHMANDU 1037 
     ¶B. (B) KATHMANDU 1036 
     ¶C. (C) KATHMANDU 1008 
     ¶D. (D) KATHMANDU 1007 
 
Classified By: AMB. MICHAEL E. MALINOWSKI.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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¶1.  (C)  Prime Minister Sher Bahadur Deuba was expelled from 
the Nepali Congress Party for three years on May 26.  As a 
counterattack, Deuba plans to call a party General 
Convention, with the possible aim of deposing Nepali Congress 
Party President G.P. Koirala from his post.  On May 27 King 
Gyanendra re-imposed the state of national emergency, which 
had expired on May 25, by royal ordinance until August 27. 
Deuba has not yet formed a new Cabinet and told the 
Ambassador it may be a few weeks before he is able to do so. 
He reiterated to the Ambassador his commitment to holding 
free and fair elections by the November 13 scheduled date. 
Behind-the-scenes efforts to mend the rift between the PM and 
Party President Koirala continue, but for right now the 
oldest, largest party in the country seems remains polarized. 
 End summary. 
 
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NEPALI CONGRESS NO MORE 
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¶2.  (SBU) As expected, on May 26 the Central Working 
Committee (CWC) of the Nepali Congress Party revoked Prime 
Minister Sher Bahadur Deuba's party membership after he 
defied its directive not to seek extension of the state of 
emergency.  The expulsion, which will remain in effect for 
three years, follows the May 23 suspension of Deuba's party 
membership, and is only the most recent step in the unfolding 
confrontation between Deuba and Nepali Congress Party 
President G.P. Koirala. 
 
¶3.  (SBU)  Accusing the Party leadership of 
"short-sightedness" and "jealousy," Deuba retaliated by 
announcing that he might try to convene a party General 
Convention.  (Note:  The General Convention meets every five 
years.  However, the Party President must call an 
out-of-cycle General Convention if 25 percent of the 
Convention's 1,500 members sign a petition calling for such a 
meeting.  End note.)  The PM has signaled that he might try 
to use the special session of the General Convention to bring 
a no-confidence motion against Party President Koirala. 
(Note:  Two-thirds of the membership is required to carry 
such a motion.  It is not clear if Deuba would have the 
support within the party to carry such a vote.  End note.) 
 
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EMERGENCY EXTENDED 
-------------------- 
 
¶4.  (U) Also as expected, on May 27 King Gyanendra 
re-instituted, by royal ordinance, the state of national 
emergency that had lapsed the previous day.  The Prime 
Minister was forced to rely upon a royal ordinance to 
resurrect the emergency since neither house of 
Parliament--with the Lower House dissolved late May 22 and 
the Upper House prorogued on May 24--was in session when the 
emergency expired.  Under the Constitution, the reinstated 
emergency may last for only an additional three months--until 
August 27.  (Note:  A Parliamentary extension would have 
bought the Government an additional six months.  End note.) 
 
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A RETROFITTED CABINET? 
NOT YET 
----------------------- 
 
¶5.  (C) Deuba has made no move yet to refit his Cabinet--a 
Cabinet whose bloated size and general inefficiency proved a 
source of constant criticism for the PM from both inside and 
outside his party, as well as from donors, including us.  The 
PM's much-anticipated May 24 televised address to the nation 
focused primarily on his reasons for seeking an extension to 
the emergency--and thus for defying his party's orders--and 
his decision to dissolve Parliament and call for new 
elections.  Only two of the 39 members of his Cabinet have 
tendered resignations, one of whom--former Finance Minister 
Ram Sharan Mahat--has already signaled his willingness to 
rejoin a new Cabinet (Ref B).  (Women, Children and Social 
Welfare Minister Kharel has rescinded his May 24 offer to 
resign and is back in.)  At a May 27 dinner, the PM told the 
Ambassador he may have to defer addressing the question of a 
new Cabinet for at least a few weeks as his attention is 
riveted on more urgent matters, such as ensuring that free 
and fair elections take place as scheduled by November 13. 
 
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COMMENT 
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¶6.  (C)  Party President G.P. Koirala's support is generally 
deemed more solid among party rank-and-file out in the 
districts.  Thus Deuba's threat to convoke a General 
Convention--if indeed he could garner the signatures to do 
so--may be no more than a feint in the continuously 
escalating tit-for-tat between the PM and his rival that now 
threatens to split Nepali democracy's founding party.  While 
some party insiders, such as former FinMin Mahat, continue to 
hold out hope that behind-the-scenes efforts may help defuse 
the confrontation, the rapid chain of events over the past 
weeek has not been especially promising.  With each 
successive move, the antagonists raise the stakes still 
higher--and back themselves further and further into 
increasingly narrow corners.  Koirala's strident claims of an 
anti-democratic conspiracy in Deuba's actions (Ref A) can 
only exacerbate the rift.  That said, both combatants' sense 
of political survival--and the realization that neither can 
do well in the upcoming elections if the Nepali Congress 
splits--may yet succeed in keeping the strife-ridden party 
together. 
MALINOWSKI