Touted as decisive, the talks in Kathmandu on Wednesday between the ruling Left coalition and agitating Madhes-based groups failed to resolve the two-month-old impasse that has led to blockade of the land-locked Himalayan nation's southern border with India.

Discontented with the provisions of the country's new federal republican constitution, the political parties and ethnic groups based in the Nepal Terai -- or Madhes -- have blockaded the Nepal-India border and the resulting scarcity of essential commodities -- including foodgrains, fuel and medicines , with Kathmandu looking elsewhere for replenishments.

Expressing displeasure over the demarcation of boundaries in the seven-province model, the Madhes-centric parties found no common ground with the government at the meting in Kathmandu which saw the largest party in Nepal's legislature, the Nepali Congress, skipping the meeting.

The main opposition Nepali Congress (NC) blamed the government for not informing it on time and the NC leaders made it clear that there could not be a change in the seven-province model as enshrined in the new constitution that was promulgated on 20 September.

Earlier, the leaders said the meeting would discuss a 'middle path' approach proposed by Unified CPN (Maoist) chairman Pushpa Kamal Dahal on federalism and a break-through was expected.

But the proposal was rejected by the agitating Madesh-based parties. Dahal told reporters later that ruling parties mooted three proposals but the agitating Madhesi Morcha rejected all of them.

"My first proposal was to address demands of proportional representation and constituencies in proportion to population right away and sort out dispute over federal demarcation through future talks," he said. "But the Morcha demanded a package deal before withdrawing its agitation."

"I also proposed formation of an all-party committee or parliamentary panel to strike a package deal, but the Morcha again disagreed," he added.

With the failure of the talks, the agitating Morcha, an alliance of four Madhes-based parties, has warned of intensifying its agitation from Thursday.

NC General Secretary Krishna Prasad Sitaula said only a political mechanism could sort out the standoff on demarcation of the various provinces and not any proposal floated by Dahal.

The bottom-line laid down by the agitating Morcha was a redrawing of the seven provinces and that there should be only two states in the southern plain adjunct with India.

After an hour-long meeting, Morcha leader Upendra Yadav said: "We just had tea and biscuits...."

Yadav, however, said the Morcha was still hopeful that a consensus could be forged. "We are still ready to sit for more talks," he said. "But the ruling collation must come up with a concrete proposal for a package deal."

The NC, the leader of the former coalition government when Nepal's constitution was promulgated on 20 September, is now out of the government. It is refusing to be part of the Dahal-led negotiation panel.

As the government and Morcha failed to forge a consensus in Kathmandu, Madhesi protestors continued to stage a sit-in at Birgunj border customs point disrupting supply of essential commodities to Nepal.

Prime Minister K.P. Oli and senior leaders from his Communist Party of Nepal (Unified Marxists-Leninists) like Madhav Kumar Nepal and Jhalanath Khanal, also opposed the proposal floated by Maoist chairman Dahal.

Oli favoured forming a commission for fresh demarcation of the provinces.