Nepal's parliament picked a social democrat as its new Prime Minister on Monday after a last-minute power-sharing deal ended a deadlock that had lasted since an election two months ago.

Sushil Koirala, the head of the centrist Nepali Congress party, was elected with support from the communist UML party, which holds the second largest number of seats in parliament.

A new leader: Nepalese Prime Minister Sushil Koirala. Credit:Reuters

Mr Koirala, who was once jailed for his involvement in a plane hijacking and belongs to a noted political family, faces the task of drafting a new constitution for the Himalayan country.

Nepal, wedged between India and China, has been plagued by conflict, instability and intractable political division for years. It has been running under an interim constitution since the 2008 abolition of a centuries-old monarchy.