Nepal's King Gyanendra has reappointed as prime minister Sher Bahadur Deuba, whose sacking in 2002 triggered a political crisis.
Deuba (L) was sacked by the king for failing to organise elections
The move came just weeks after the last premier, Surya Bahadur Thapa, resigned in the face of daily street protests.
The opposition has been campaigning for the king to abandon executive powers and install a multi-party government.
The king sacked Mr Deuba in 2002 for failing to organise elections or tackle the country's Maoist rebels.
The palace says Mr Deuba will be sworn in on Thursday. He has promised to seek consensus.
"I have begun talks with other political parties to end
the political deadlock and form a new government," he told reporters as he left the palace after his appointment.
"I will try to establish peace in the country as soon as possible and hold general elections."
This is Mr Deuba's third term in office and he will serve with executive powers, a palace statement said.
Nepal has seen a long campaign of anti-king protests
Mr Deuba is the president of the breakaway faction of the centrist Nepali Congress which had a majority in the parliament the king dissolved in 2002.
The BBC's Sushil Sharma in Kathmandu says the reinstatement is a setback to the monarch, whose successive two appointees as premier failed to pacify the opposition and tackle the long-running Maoist insurgency.
Our correspondent says Mr Deuba's appointment is likely to split the five-party opposition alliance and defuse its protest campaign.
Nepal's political parties gave a mixed response to the appointment of Mr Deuba.
The Nepali Congress, which was at the forefront of protests, regretted the king's decision.
"Protests will continue because sovereignty has not been handed over to the people," party president Girija Prasad Koirala told the BBC Nepali service.
But he said his party would meet on Thursday before deciding whether to support Mr Deuba or not.
The United Marxist-Leninist Communist Party will also meet before formulating its stance, a senior leader said.
The party wanted its leader to be premier but has indicated it may be flexible on who leads the country.
The opposition alliance has fought a long-running campaign for the reinstatement of the dissolved parliament or for the establishment an all-party government comprising its nominees.
Mr Deuba's Nepali Congress-Democratic faction had been running a separate campaign to press for his reinstatement.