Nepal’s MPs have agreed to extend its parliament by up to a year, as reports suggest the prime minister agreed to resign to allow the deal to go through.

Maoist opponents had demanded Madhav Kumar Nepal’s resignation as part of the deal to avert political crisis.

The parliament, elected in 2008, had been due to expire on Friday.

However, the extension was agreed at the 11th hour by the Maoists and the ruling Communist Party of Nepal and Nepali Congress parties.

Dinanath Sharma, a spokesman for the Maoist party – the largest in parliament – was reported as saying agreement had been reached to form a new national consensus government.