KP Sharma Oli has pulled out yet another rabbit from his old bag of tricks.

Barely four months after extending support to Pushpa Kamal Dahal’s leadership of the government, CPN-UML, the second largest party in Parliament, has decided to end its political association with Dahal and join hands with Nepali Congress, the largest party.

Saturday’s apparently sudden meeting between Nepali Congress President Sher Bahadur Deuba and CPN-UML chair KP Oli at the latter’s residence laid the ground for a potential new political alliance between the two parties.

Multiple senior Congress and UML leaders told the Post that Deuba and Oli had already reached an understanding in a meeting on Sunday midnight at an undisclosed location in Kathmandu, where they tentatively agreed to form a new government, amend the constitution, and to work out a power-sharing formula, which they reportedly shared with a few confidants.

As per the understanding between Congress and UML, Oli will lead a new ‘national consensus’ government for a year and a half. For the remaining term, Deuba will be the prime minister, a Nepali Congress leader who is preparing a draft agreement between the two parties told the Post on Monday night.

A four-member task force has prepared the draft agreement, which will be released on Tuesday. It will detail the power-sharing arrangement, propose amendments to the constitution, review the electoral system including proportional representation, change national assembly arrangements, and discuss size of provincial assemblies, according to a taskforce member.

Ramesh Lekhak and Gyanendra Bahadur Karki from the Congress and Shankar Pokhrel and Ramesh Badal from the UML had held several rounds of talks in the past two weeks, said a UML leader.

If everything goes according to plan, a deal will be public by Tuesday, and chairman Oli will stake claim to the post of prime minister on Tuesday itself, a UML minister said.

Two Congress leaders familiar with the meeting as per the understanding between Oli and Deuba, Oli will lead the new government with the support of Nepali Congress and other fringe parties. The Congress will lead 10 ministries including home, and the UML nine including finance, as per the draft understanding.

Likewise, the Congress and the UML will lead three provincial governments each, with the government in Madhesh to be led by a regional party.

There has also been a verbal agreement on formation of a high-powered constitution review and suggestions committee under a former chief justice of the Supreme Court.

Deuba and Oli had reportedly been in talks over the past one month in order to address some pressing national issues, and have agreed to amend the constitution where needed. They are also said to have reached understandings on foreign policy, economic crisis, and governance.

One big issue that is said to have caused a rift between Prime Minister Dahal and Oli was over the appointment of the chairman of the Securities Board of Nepal or Sebon. The appointment process was ultimately cancelled on Saturday due to differences between the two leaders.

Sources inside the Finance Ministry said the selection process became the victim of the political power play between the UML and the Maoist Centre, leading to the cancellation of the entire process.

But after a meeting between the two on Monday morning, a Cabinet meeting later in the day decided to give continuity to the old three-member committee to nominate candidates for Sebon chair.

Some media reports tried to link the latest Deuba-Oli meeting with yet another development, as it took place a day after Nepal Police arrested Bechan Jha, one of the alleged middlemen in the high-profile Bhutanese refugee scam.

Police last year filed cases against politicians, bureaucrats and middlemen on charges of defrauding hundreds of people by promising to send them to the US as Bhutanese refugees. But police were not able to book Jha despite his connection with the scam.

Jha is allegedly close to many political leaders, including senior Congress leaders, and the Congress leadership might have been worried that they too could be dragged into the refugee scam.

Differences between Oli and Dahal had been steadily building, including over the new Sebon chair, the appointment of ambassadors to eight countries, transitional justice, and the bringing of what Oli termed a ‘Maoist budget’ for the new fiscal year.

During their meeting on Monday morning, Oli reportedly requested Dahal to support him by stepping down.

“I had serious discussions with Nepali Congress President Sher Bahadur Deuba on the formation of a new government in order to make some changes to the constitution and to address some pressing national issues,” a UML leader quoted Oli as telling him.

According to the UML leader, Dahal offered Oli the post of prime minister within the current ruling coalition, but Oli politely turned down the offer. The UML chair instead expressed his desire to lead a consensus government, the UML leader told the Post.

Deuba and Oli were in talks for a month through different channels. After several rounds of back-channel talks and negotiations between the second-ranking leaders of the Nepali Congress and UML, they finally agreed to meet.

According to the two UML leaders who were briefed about the latest situation, time has come to form a government based on national consensus in order to address the country’s daunting challenges.

Prime Minister Dahal had called a meeting of ruling partners for 5:00 pm on Monday, but the meeting had to be postponed in light of the new situation. Dahal, who was all set to reshuffle the Cabinet, was planning to discuss the same in the meeting.