KATHMANDU  - Lawmakers in Nepal on Friday overwhelmingly elected Maoist leader and former warlord Prachanda as the Himalayan country's first republican prime minister, officials said. The vote clears the way for the ultra-leftists, still listed by the United States as a terrorist organisation, to plough ahead with their vow to radically reform one of the world's poorest nations. The vote in Nepal's constitutional assembly also ends months of political deadlock that followed the sacking of unpopular king Gyanendra and the abolition of the 240-year-old monarchy. Prachanda was backed by 464 deputies, with 113 against, constitutional assembly Chairman Subash Nemwang announced. His only rival was Sher Bahadur Deuba, a three-time former premier and member of the centrist Nepali Congress party. Assembly members cheered, clapped and banged their desks after the results were announced. "I am very happy and very emotional," a visibly overwhelmed Prachanda told reporters as he left the assembly hall in Kathmandu. The charismatic, moustachioed leader - whose nom-de-guerre means "the fierce one" - had dozens of orange garlands and silk scarves placed around his neck, and his forehead covered in red powder from traditional blessings. His appointment as the most powerful man in Nepal comes less than two years after he signed a peace deal with mainstream parties and vowed to renounce violence. Maoist number-two Baburam Bhattarai hailed a "golden dawn" for Nepal, and compared Prachanda to Napoleon and Lenin. "We have already finished destroying the roots of feudalism in Nepal. Under the leadership of Prachanda, the main agenda of the new administration will be nationalism, republicanism, economic and social transformation," he said. Born into a high-caste but poor farming family, Prachanda - whose real name is Pushpa Kamal Dahal - was driven to politics by the extreme poverty he witnessed in rural Nepal. But the school-teacher-turned-revolutionary, who was inspired by Chairman Mao and Peru's Shining Path, has had trouble shaking off his ruthless image. Critics say the ultra-leftists have yet to fully abandon violence and that their feared youth wing - the Young Communist League - must disband to prove they are committed to peaceful democracy. The defeated candidate congratulated the Maoists but warned the ex-rebels that they would not be allowed to install a dictatorship. "I would like to congratulate the Maoists for entering multi-party competitive politics," Deuba said. "We will stay in Opposition and keep an eye on the Maoists' activities while they run the government. We will oppose their actions if their activities incline towards autocracy." The United States embassy here said Washington would work with the new government even though it has blacklisted the Maoists. The European Union and Japan - also major donors to aid-dependent Nepal - also welcomed the election. Prachanda faces huge challenges including urgently dealing with soaring food and fuel prices, and integrating the 20,000-strong rebel army that is currently confined to United Nations-monitored camps into the national army. "The integration of People's Liberation Army into the Nepal Army will see lots of arguments and counter-arguments. The way they deal with the army is very crucial," said Amit Dhakal, editor of the Kathmandu Post newspaper. "The Maoists will try to bring in populist and radical economic reforms. But financially they will have lots of constraints."