Immediately being elected prime minister, Baburam Bhattarai stated his three priorities: peace, constitution, and relief to the people. The next day, the legislature-parliament amended the Interim Constitution 2007 of the tenth time, extending the term of the Constituent Assembly by three months. There were no doubts and confusion regarding the extension of the CA term this time.

However, there was dispute regarding cabinet expansion between UCPN (M) and United Democratic Madhesi Front (UDMF). The faction under Vaidya had proposed Narayankaji Shrestha and CP Gajurel as deputy prime ministers with important ministries; however, Dahal faction was not in favour of installing two deputies to the prime minister and including Shrestha in the government. After no agreement could be reached on the precedence and rank after the prime minister, it was left to the chairperson Dahal and vice-presidents Vaidya and Bhattarai to settle the issue.

The expansion of the cabinet got delayed as there was no agreement among the three senior leaders. The UCPN (M) wanted to move the peace process forward after there was no agreement on power-sharing. The meeting of the Standing Committee on August 30 decided to take its own peace proposal forward which it had unveiled earlier with commitment to complete the peace process within 45 days if the government was formed under its leadership.

The next day, the leaders of the UCPN (M), Nepali Congress, and UML met at the prime minister’s residence in Baluwatar. It was agreed in the meeting to hand over the keys of the arms containers in the Maoist cantonments. A meeting of the Army Integration Special Committee (AISC) the same day decided to receive the keys through special teams. A meeting took place at Dahal residence in Naya Bazaar to finalise the handing over of the keys among the chairperson Dahal, vice-chairperson Vaidya, and Prime Minister Bhattarai; however, the Vaidya opposed the proposal. After that, chairperson Dahal discussed the issue with the commanders of all the seven cantonments and instructed them to hand over the keys. Vaidya expressed his opposition in a press release: “I request all concerned to immediately withdraw this suicidal decision”. Chairperson countered, “We request all the party cadres, People’s Liberation Army, and general people to work with patience and determination for official party decision and not be provoked by Kiran (Vaiday)-issued statement and activities against the party policies and decision”.

Vaidya faction enforced chakkajam (transport halt) and took out torch rallies. The meeting of the Standing Committee was boycotted by vice-chairpersons Vaidya, Narayankaji Shrestha, general secretary Ram Bahadur Thapa, secretary CP Gajurel, Dev Gurung, and Netra Bikram Chand. “Handing over the keys is a totally disarmament process, and we can never agree to this in principle,” said Vaidya through a press release. Despite vehement protests from the Vaidya faction, keys to the arms containers of all the seven cantonments were handed over to the special team of the AISC. Nepali Congress and UML termed the development as positive. The resulting dispute within the party has proved that the problems in the peace and constitution-drafting process lies within the UCPN(M), rather than with other parties as they used to allege. The dispute within the UCPN (M) has again raised doubts about the peace process moving ahead smoothly.

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