Communist Party of Nepal (Marxist-Leninist), a splinter group from the Communist Party of Nepal (Unified Marxist-Leninist) formed on March 5, 1998. Sahana Pradhan was the chair of the party and Bam Dev Gautam the general secretary. Within the CPN(UML) a power struggle had taken place after the death of Madan Bhandari. Gautam and Pradhan advocated a tactical alliance with the Rastriya Prajatantra Party, which the CPN(UML) general secretary Madhav Kumar Nepal opposed. Moreover, CPN(ML) opposed the Mahakali river treaty with India. CPN(ML) described the split in the following wordings in the manifesto:
CPN(ML) won over the majority of the party membership in the Kathmandu Valley and almost half of the parliamentary group of CPN(UML). From September to December that year, CPN(ML) took part in the government led by G.P. Koirala.
In the 1999 parliamentary elections CPN(ML) got 6.4% of the votes nationwide, but failed to win a single seat. The division of the communists directly contributed to the electoral victory of the Nepali Congress (which had less votes than CPN(ML) and CPN(UML) combined).
In January 2002 CPN(ML) formed a three-member team to negotiate re-unification with CPN(UML). The team was headed by R.K. Mainali. On February 15, 2002 CPN(ML) reunified with CPN(UML). But C.P. Mainali, an important party leader, refused to go along and reconstituted his own CPN(ML).