KATHMANDU: The ruling coalition is on the verge of collapse with the escalation on the controversy over the ratification of US grant approval Millennium Challenge Corporation (MCC).

This comes as the ruling Nepali Congress (NC) and CPN-UML are close to reach new political understanding as the ruling parties, the CPN-Maoist Center and CPN-Unified Socialist, are not ready to ratify the MCC agreement in the parliament.

A source close to Prime Minister Sher Bahadur Deuba confirmed that the alliance was about to formally dissolve, adding that, a new agreement with the UML could be reached (Thursday night) tonight.

Sources close to the PM said and the NC said ruling coalition could not move forward even if no agreement was made between the UML and the NC due to differences over MCC.

Source added, “The prime minister is committed to passing the MCC due to its importance in international relations. However, as the ruling parties, Maoists and Unified Socialist, have been engaging towards thwarting the government-tabled MCC, cooperation with them is likely to be severed with them today and tomorrow.”

General Secretary of the Nepali Congress Gagan Thapa, confirming that the alliance was on the verge of collapse, said that the alliance could not move forward in the status quo. NC senior leader Ram Chandra Poudel, who reached his home district Tanahun yesterday (Wednesday), said a situation had arose in which the NC had to partner with the UML by break the alliance to get the MCC ratified.

According to sources, after the ruling parties deiced to vote against MCC, Prime Minister Deuba is prepared to dissolve the alliance and strike an agreement with the UML was prepared.

In tonight’s meeting, a written agreement between the NC and the UML would be drafted by allocating four priovinces to the UML.

After the MCC was tabled in the parliament on Sunday, Prime Minister Deuba had initiated the dialogue with the UML after the coalition parties did not support the ratification of MCC.

Various NC leaders had been suggesting to Prime Minister Deuba to move the MCC forward even by dismantling the alliance.