Vowing to stay in his former realm, Nepal’s deposed King Gyanendra moved out of the Narayanhiti Palace in Kathmandu this evening, two weeks after the country’s Maoist-led assembly voted to abolish the world’s last Hindu monarchy.

Gyanendra Shah — as he is now officially known — handed the plumed crown and sceptre of the 239-year-old Shah dynasty to government officials along with the palace and other royal assets that have now all been nationalised.

The man still revered by some as the incarnation of the Hindu god Vishnu then swept out of the palace in a black limousine, driving behind an armed police pick-up, and past thousands of onlookers and hundreds of riot police.

A few dozen opponents chanted "Gyane, thief, leave the country!" using a derogatory dimunitive of his name, as he headed towards a small summer palace on the capital's outskirts, where officials say he can stay until he finds a private home.

"I have assisted in and respected the verdict of the people," Mr Shah said in a televised address before leaving the Narayanhiti, which was home to the royal family for more than 100 years and will now become a national museum.

“I will stay in the country to help establish peace,” he said, sitting in a grand palace hall surrounded by hunting trophies including two stuffed tigers and a rhino head.

It was his first public address since Nepal’s new assembly — elected in April — voted on May 28 to abolish the monarchy and form a republic with a president as head of state.

The assembly, dominated by Maoist rebels who ended their insurgency in 2006, had given him just 15 days to vacate the palace - or face eviction by force.

Mr Shah had been expected to move back into a private residence that he owned before taking the throne, when he earned a fortune in the tobacco, tea, hotels and property businesses.

Surya Thapa, a journalist who has written three books on the Himalayan royals, estimates that Mr Shah has $195 million (£100 million) stashed inside Nepal and even more abroad.

However, Mr Shah asked the Government to let him stay in the Nagarjung summer palace because his playboy son, the former Prince Paras, was already occupying his private residence.

The Government agreed last week, without saying for how long, and is also reported to have allowed Mr Shah a security detail of 75 police officers, although he asked for 400 soldiers.

Mr Shah — whose 600 servants have now become government employees — used his 14-minute address to deny the rumours about his wealth.

“All my properties are in Nepal,” he said. “All the properties I have are nationalised.”

He also denied playing a role in the palace massacre that led to his coronation in 2001.

Mr Shah took the throne after his brother, the popular King Birendra, and eight other royals were gunned down by a lovesick and intoxicated Crown Prince Dipendra, who then shot himself.

"The accusations that were targeted against us were inhuman," he said.

But he stopped short of apologising to those killed during a popular uprising that forced him to give up absolute power in 2006, less than a year after he sacked the Government.

"If any people have been harmed, I hope you understand it was unintentional," he said.

Since the uprising, his portrait on bank notes has been replaced by a picture of Mount Everest and his name deleted from the national anthem. His $3.1 million annual allowance has been axed and he has even been asked to pay his own electricity bills.

But the biggest surprise of the day came when officials revealed that a 94-year-old former lover of a long-dead King was living in the Narayanhiti and would be allowed to stay there.

Sarala Gorkhali was the youngest mistress of King Tribhuwan, who ruled from 1911 until his death in 1955, and had no house or living relatives, according to the interim Home Minister.

He said that she would be allowed to use two buildings on the palace grounds, along with the former King Gyanendra's stepmother, Ratna, 80.

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