Deposed Nepal King makes final palace exit

Deposed Nepal King Gyanendra has left his palace for the last time as Nepal now faces new challenges as a federal democratic republic.

Nepal's deposed King Gyanendra and his wife Wednesday swept out of the sprawling Narayanhiti complex in the heart of the capital in a limousine. He was driven past thousands of onlookers and hundreds of riot police.

About 300 royalists gathered at a side gate of the palace. They were shouting anti-government slogans and demanding that Gyanendra be allowed to stay.

Three hours earlier, the former monarch calmly addressed his first-ever news conference.

Nepal's deposed King Gyanendra said, "In the former Hindu kingdom of Nepal, the birth place of Buddha, the efforts started with the best of intentions to ensure peace and prosperity in the country... but were not successful over time, which I have accepted."

A specially elected assembly voted overwhelmingly to abolish the 239-year old monarchy two weeks ago. They ordered Gyanendra out of his palace and into an old royal hunting lodge outside the capital. But Gyanendra will be allowed to continue his business interests.

Beyond removing its monarchy the world's newest republic now faces more formidable challenges. The government in Nepal will have to find a way to get anti-government rebels to destroy their weapons. Also on the new republic's agenda restarting a moribund economy, battling corruption and restoring the rule of law.

Political parties still have to agree on who should be Nepal's new president and prime minister. And then get down to the complex job of drawing up a new constitution.