Nepal's King Gyanendra replaced outgoing Prime Minister Lokendra Bahadur Chand with 75-year-old royalist politician Surya Bahadur Thapa from the same party on Wednesday, state radio said.
A palace statement read over state radio said Gyanendra had also transferred his executive powers to Thapa, who has been prime minister four times since 1966.
The five main opposition parties which led months of protests that forced Chand to resign last week had proposed their own candidate and Gyanendra's decision could stir more anger in the troubled Himalayan nation.
The palace statement, however, said Gyanendra, catapulted to the throne after royal family massacre in 2001, had asked Thapa to name politicians from all major parties to form a new Cabinet.
There was no immediate reaction from the opposition groups.
More from rediff