Kathmandu (PTI): As uncertainty continued on the vexed issue of government formation in Nepal, India on Thursday asked the CPN-Maoist, which emerged as the single largest party in the historic Constituent Assembly elections, to form a coalition of national unity and move forward the peace process on the basis of political consensus.

"The CPN-Maoist being the largest party should take a position of responsibility to develop consensus and to form a government of national unity in this critical period of transition," India's newly-appointed envoy Rakesh Sood told reporters here.

He said New Delhi would like to see a peaceful, stable and democratic Nepal.

The Constituent Assembly that has been elected will have to take decisions on a number of "important and sensitive issues" and these decisions have to be based in the spirit of consensus, he pointed out.

Sood said the political parties should work on the basis of national consensus as the main focus in the next two years would be to draft a new constitution.

He said during his meeting with the Nepalese political leaders he told them that India would like to see a peaceful, stable, democratic and prosperous Nepal.

We had extended all possible help to Nepal to ensure a peaceful election and now we are ready to work with the government of Nepal in accordance with the priorities and the wishes of the government and the people of Nepal.