COCHRANE: Inside the entrance hall of Narayanhiti Palace, the décor is pretty much what you'd expect from a Himalayan monarchy. Amidst the formal furniture, royal portraits and hunting trophies are the main features, with two stuffed tigers rearing up on their hind legs on either side of the staircase. Two weeks ago, a specially elected assembly voted to declare Nepal a republic and gave the king 15 days to pack his bags. With rowdy journalists crowded around him, Gyanendra used his last day at the central Kathmandu palace to address the nation.

GYANENDRA: The former king said he would stay in Nepal and contribute to the independence and prosperity of the country. Gyanendra dismissed rumors he would live in exile, saying all his property and money is within Nepal. Controversially, he discussed the conspiracy theories, popular amongst most Nepalis, that he was behind the royal massacre in 2001, which killed most of the royal family and propelled him to the throne. He described the rumors as "inhumane" and repeatedly denied any involvement. In his 15-minute speech, the deposed king said he had handed the jewel-encrusted crown and scepter over to the government and, later that evening, would leave the palace. Narayan Wagle is the editor of The Kathmandu Post. He described the occasion as historic and said Gyanendra's speech was delivered with dignity, despite the humiliating exit.

WAGLE: He appeared with a big smile, he was composed and he thoroughly managed his… the way he had to give up the palace, the crown, he managed to overcome the suffering.

COCHRANE: Wagle said it was crucial that the former king gracefully accepted the decision of the people, even if his speech didn't offer any explanation as to why the 240-year-old monarchy was overthrown. But one of the main reasons for Gyanendra's poor standing amongst the public comes back to the mysterious royal massacre. The bloodshed was officially blamed on Crown Prince Dipendra, who was said to be heavily armed, intoxicated and angry at his family for not allowing him to marry the girl he wanted.

COCHRANE: Narayan Wagle describes the king's comments.

WAGLE: He mentioned the royal massacre a number of times… that was his point.

COCHRANE: Four years after the massacre, in 2005, King Gyanendra sacked the government, saying they had failed to stop a growing Maoist insurgency. He took direct control of the country and briefly jailed critics, before mass protests in April 2006 forced him to step down. Since then, the king has kept a low profile, making few public appearances or statements. But following his address on Wednesday night, a crowd gathered outside the palace gates to cheer and to chant "come out, come out".

(SFX - crowd chanting)

COCHRANE: Several hours later, the king did come out, driven in a car through the palace gates, along with his wife and a scaled-down security detail.
He will stay temporarily at his summer retreat, another royal property on the outskirts of Kathmandu, but it's unclear where he and his family will settle.
Meanwhile the government has said the sprawling pink palace, with its stuffed tigers and bloody history, will become a museum.
Liam Cochrane for Radio Australia, Kathmandu, Nepal.

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