A now-rusting car given to the King of Nepal by Adolf Hitler is among the more unlikely items that will fill a museum being established in the palace once occupied by the Hindu Kingdom's former royal family.

The 1939 model Mercedes-Benz was donated by the Nazi leader to King Tribhuvan, the grandfather of former king Gyanendra, the last of Nepal's monarchs who left the palace last week after a newly elected parliament voted to end the 239-year-old monarchy and formally declare the country a republic.

For the past three years the car has been rusting in the grounds of the Narayanhiti palace in central Kathmandu. Prior to that it was used by an engineering college in the city to train mechanics but officials said they no longer had sufficient funds or spare parts to restore the antique car.

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Govinda Prasad Kusum, a senior official who is preparing an inventory of the property of former king Gyanendra that is being turned over to the government, told Reuters that the vintage car ought to be displayed in the museum. "The car will be a major attraction there," he said.

A lot of effort went into getting the car to Kathmandu when it was gifted to King Tribhuvan in 1940. Because there were no proper roads in the country, scores of labourers carried the heavy vehicle for several days from Nepal's southern plains to the capital city. The then king regularly used the car until his death in 1955, when it began to gather dust. Its bonnet and doors are reportedly coming off.

Yesterday, Nepal's Prime Minister, Girija Prasad Koirala, attended the first public function ever organised inside the palace. Former Maoist leaders, who ended a decade-long civil war to re-enter the political mainstream two years ago and who are the Constituent Assembly's largest party following April's election, were also present at the ceremony which declared the palace a museum.

The Prime Minister said Nepal should be proud that the king had left the palace without bloodshed. "This is a historic and unprecedented event," he said. "The world is watching us with awe and respect at this moment."

The vintage car is not the only intriguing item associated with King Tribhuvan that is being left in the palace. Last week, when Gyanendra left the pink-painted palace, it was revealed that a 94-year-old former mistress of Tribhuvan had been living in the complex and that she would be allowed to stay there. The government said that Sarala Gorkhali would remain there because she had nowhere else to go.

The decision to abolish the monarchy was linked to the peace process that ended the civil war that claimed up to 13,000 lives. Gyanendra became king after a 2001 palace massacre in which the Crown Prince shot dead eight members of the royal family before turning his gun on himself.