"The party central office has ordered all the district committees to make all donation campaigns completely voluntary, and not to open new revenue offices," rebel leader Prachanda said in an emailed statement.

The rebels made the move amid criticism from political parties that extortion from businesses was not in the spirit of a landmark agreement to draft an interim constitution and share power after a decade of insurgency that has left more than 12,500 people dead.

The two sides led bloody protests in April that forced King Gyanendra to reinstate parliament after seizing absolute power in February 2005.

Last week, in an interview with AFP, he said that the rebels would not go back to war and the two sides had agreed to hold elections to a body that would redraft Nepal's constitution.