Dismissing as "ridiculous" India's fears that Nepal was moving closer to China, Prime Minister Prachanda has, however, said there was a "crisis of confidence" between him and the Indian establishment.
Prachanda, the Maoist leader who resigned as Prime Minister last week after Nepal's President Ram Baran Yadav annulled his dismissal of the Army chief Gen Rukmangad Katawal, said that India had backed the "extra-constitutional" action of the President.
"We are fighting for civilian supremacy (over the army) but directly or indirectly the new position of New Delhi is not consistent with civilian supremacy."
"To support the steps of the President which are extra-constitutional and to support the army chief is not consistent with civilian supremacy," the caretaker Prime Minister told NDTV in an interview.
Asked if there was a lack of trust between India and Maoists, he replied, "Maybe. But we need to have more interaction and debate on the issue (with India). We shall have to review the process of understanding and I hope ultimately we will come to a new agreement and we will go ahead with the peace process."
To a question if there was a trust deficit between India and Nepal, Prachanda said, "Yes, there is a crisis of confidence....I hope ultimately we will be able to have a new understanding and level of confidence."
He warned that if the "peace process is derailed it will not be helpful to any country, Nepal or India".
Prachanda blamed "bureaucratic and security officials" in India for the trust deficit and said that because India's political leaders were busy in the election campaign these officials were handling Nepal. "This is really unfortunate for me," he added.
Answering a spate of questions on Nepal's growing ties with China, the caretaker Prime Minister said that his country wanted good-neighbourly relations with both India and China. "There is no dispute or controversy on this issue."
Explaining visits of several Chinese delegations to Nepal in recent months, Prachanda said that the Chinese leadership was very much concerned about "a serious incident" in Tibet last year and any relationship between Nepal and that incident. He did not elaborate.
"Therefore, naturally they (the Chinese) were more active about the changing political scenario in Nepal. Time and again their delegations came. Unfortunately the Indian side thought that we had invited them," he said.