KATHMANDU - The Nepalese government has run out of money for essential services including hospitals and schools after the Maoist party blocked its new budget, the finance minister said Monday.

Surendra Pandey said the impoverished nation faced a "financial crisis" if parliament failed to pass the budget in the next two weeks, and had already been forced to stop paying ministers' salaries.

Maoist demonstrators have repeatedly prevented Nepal's parliament from sitting since the party's government fell in May, blocking the new administration's attempts to pass this year's budget.

"We are at a very critical stage," Pandey told AFP. "If the budget is not passed in the next two weeks, there will be a financial crisis in the country.

"We are in discussions with the Maoists to open parliament to pass the budget and we hope they will allow the resumption of house business."

Pandey said the crisis would affect thousands of patients in government-run hospitals as well as school pupils and prison inmates.

"We are now unable to release funds for essential services in major government hospitals, including paediatric and maternity hospitals, which will affect the treatment of thousands of patients," he said.

"We are also worried about the condition of prison inmates as we won't be able to release money for food."

Nepal's Maoist-led government fell in May after less than a year in power in a row over the future of the army.

The former guerrillas waged a decade-long war against the state before a UN-brokered peace agreement ended the conflict in 2006.

Nepalese law states that government departments can spend up to one third of their allocation before parliament approves the new budget, and Pandey said almost half had now reached that limit.