Britain announces 46 percent hike in aid to Nepal

The amount is an increase of 46 percent from the previous three years, the Department for International Development (DFID) said in a statement.

Britain is a key donor to aid-dependent Nepal, which only relatively recently emerged from a decade-long conflict that caused more than 13,000 deaths and displaced thousands.

The Maoists rebels locked up their arms in metal containers, watched by international monitors, and confined thousands of their former fighters in camps under a 2006 peace deal.

They are now heading a coalition government after a surprise victory in last year's election for a constituent assembly meant to prepare a new constitution, part of the landmark deal.

Visiting International Development Minister Mike Foster said the aid would be used for the peace process by helping the preparation of a new constitution and support of Maoist ex-combatants living in UN-monitored camps for two years.

"This is too long," said Foster, who visited a Maoist camp in west Nepal. "Agreement needs to be reached to move forward on the future of armies."

Some Maoist leaders want the guerrillas to join the national army, which has so far refused to take the "indoctrinated" fighters.

Analysts say the rehabilitation of the ex-combatants is key to lasting peace in the impoverished nation, one of the 14 poorest in the world.

Foster said the British aid will also go to basic health care and education, and create jobs as well as growth.

Impoverished Nepal gets nearly two thirds of its costs for economic development in international aid.

(Reporting by Gopal Sharma; Editing by Bappa Majumdar and Jerry Norton)