K P Sharma Oli is set to be sworn in as Nepal's Prime Minister for the third time on Friday, a day after he was reappointed to the post as the Opposition parties failed to secure majority seats in Parliament to form a new government.

President Bidya Devi Bhandari reappointed CPN-UML Chairman Oli, 69, as Prime Minister on Thursday night, three days after he lost a crucial trust vote in the House of Representatives.

He previously served as prime minister from October 11, 2015 to August 3, 2016 and again from February 15, 2018 to May 13, 2021.

President Bhandari will administer the oath of office and secrecy to Oli at a ceremony at Shital Niwas on Friday at 2:30 pm local time.

The president had asked the Opposition parties to come up with the support of majority lawmakers to form a new government by 9 pm on Thursday after Oli lost the vote of confidence in the House on Monday.

Until Thursday, Nepali Congress president Sher Bahadur Deuba, who got backing from CPN-Maoist Centre chairman Pushpakamal Dahal "Prachanda" was hopeful to get sufficient votes in the House to stake his claim as the next Prime Minister.

But as Madhav Kumar Nepal took a U-turn after his last-minute meeting with Oli, Deuba's dream to become the next Prime Minister was shattered.

Oli will now have to take a vote of confidence at the House within 30 days, failing which, an attempt to form a government under Article 76 (5) of the Constitution would be initiated.

The CPN-UML, headed by Oli, is the largest party with 121 seats in the 271-member House of Representatives.

At present 136 votes are needed to form a majority government.

If the parties fail to form a new government in line with Article 76 (5) or the Prime Minister elected under this provision fail to secure the vote of confidence again, the sitting Prime Minister can recommend the President to dissolve the parliament and announce the date to hold general elections within the next six months.

Nepal plunged into a political crisis on December 20 last year after President Bhandari dissolved the House and announced fresh elections on April 30 and May 10 at the recommendation of Prime Minister Oli, amidst a tussle for power within the ruling Nepal Communist Party (NCP).

Oli's move to dissolve the House sparked protests from a large section of the NCP led by his rival 'Prachanda'.

In February, the apex court reinstated the dissolved House, in a setback to Oli who was preparing for snap polls.