Thousands of supporters of Nepal’s former royal family have held a rally demanding the restoration of monarchy in the Himalayan nation.

Demonstrators in Kathmandu gathered around the statue of King Prithvi Narayan Shah, who started the Shah dynasty in the 18th century. The last Shah king – Gyanendra – was forced to step down and the monarchy abolished in 2008, making Nepal a republic.

There are still many supporters who seek to bring the monarchy back and rally every year on the birth anniversary of Prithvi Narayan.

Some previous rallies have turned violent, with clashes between demonstrators and police.

Wednesday’s rally was peaceful, but police in riot gear kept a close watch on the event that included participants waving flags, playing music and chanting slogans to praise the monarchy.

Nepal Rally
President of Nepal Bidhya Devi Bhandari pays her respects in front of a statue of King Prithvi Narayan Shah (AP)

Nepal’s new government led by Prime Minister Pushpa Kamal Dahal declared Wednesday a public holiday to mark Prithvi Narayan’s birthday.

Mr Dahal led Maoist communist rebels between 1996 and 2006, seeking to abolish the monarchy in Nepal.

Gyanendra became the king after his elder brother King Birendra was assassinated in a palace massacre in 2001, but remained unpopular.

Political parties teamed up with the Maoist insurgents to organise protests, forcing him to give up power in 2006.

Two years later, parliament voted to abolish the monarchy. Gyanendra, 75, remains a common citizen and is not politically active.

The protesters welcomed the government’s declaration of a public holiday and allowing them to hold the rally.

“The monarchy needs to return to Nepal,” said Ram Prasad Upreti, a retired medical doctor.

“We are seeking a ceremonial king and we are fine with an executive prime minister, but need a ceremonial king.”