Nepal's prime minister called fresh elections in six months after politicians failed to meet a deadline on Sunday to agree a new constitution.
Baburam Bhattarai said he was left with no choice after four years of deadlock.
Nepal no longer has a sitting parliament or a constitution and some are questioning the PM's legitimacy.
After two days of protests, the streets were quiet on Monday.
Parliament has been extended four times since 2008 while a special assembly has struggled to reach consensus over the drafting of a new constitution.
Political parties were unable to agree on the issue of whether states in a new federal system should be along ethnic lines.
Elections 'unconstitutional'
When the latest deadline was missed, Baburam Bhattarai said there was "no alternative" but polls in November and that he would form a caretaker government.
"Though we were unable to promulgate the constitution, we have decided to seek a mandate through elections for a new Constituent Assembly on 22 November," the prime minister announced in a televised address to the nation.
The move came after a cabinet meeting decided to hold elections rather than declare a state of emergency, which would have allowed parliament to be extended for six months.
But political parties disagree on his right to call elections and take this position- and three of them have now resigned from government. Some political parties within the coalition also argued elections were unconstitutional.
The prime minister argues that the Supreme Court supports this stance, because it had ruled earlier that if the constitution was not drafted in time "the alternative would be to hold another election".
Mr Bhattarai, who is a member of Nepal's Maoist party and led the national unity government made up of Nepal's four major parties, blamed rival groups within the coalition for the breakdown of talks.
There is acrimonious debate over the ethnic identity of states and this has sparked violent protests in recent weeks.
The Maoists want state boundaries which reflect different ethnic groups and are named after them. They say this would bolster the groups' sense of identity and give them more autonomy.
Those who disagree say that such ethnic divisions could cause instability and could sow the seeds of disintegration.
Nepal's interim constituent assembly was elected for a two-year term when the country became a republic in 2008.
The assembly's formation came two years after pro-democracy protests forced Nepal's king to give up his authoritarian rule and restore democracy in the country.
One of the assembly's first decisions was to abolish the centuries-old monarchy and convert Nepal into a republic.
Its tenure has been extended four times, as political parties have repeatedly failed to draft a new constitution. Recently, the Supreme Court rejected any further extensions.
Political parties have been able to resolve some differences in the past, such as the future of Maoist rebel fighters who were confined to camps after they gave up arms in 2006.
But the ethnic issue has proved intractable.
Meanwhile, correspondents say that many ordinary Nepalis are fed up of the stalemate and political in-fighting.
They want a government which can start addressing issues such as economic growth and the desperate need for development.
Source: BBC News
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