Accusations and disagreements, as well as factionalism among the top leaders of the UML, had divided not only the party workers but also the parliamentarians. The ideological differences that were planted between the people's multi-party democracy presented by Madan Kumar Bhandari and the new democracy presented by CP Mainali at the fifth national convention of the UML in 2049 gradually turned into factional and personal 'egos' and started to be linked to the government.

The UML was almost divided into two parts on the agenda of whether to pass the Mahakali Treaty. From the incident of removing CP from the cabinet during the nine-month rule led by the UML in 2051 to the vote on passing the Mahakali Treaty in the parliament in 2053, the UML leaders were clearly divided into two parts. Violating the party whip, leaders CP, Bamdev Gautam, Radhakrishna Mainali, Sahana Pradhan and others voted against the Mahakali Treaty in Parliament. This further increased the rift between the party leaders.

The last incident of rifts on the level of party division was the Sixth National Convention. The rift between General Secretary Madhav Kumar Nepal and leader Gautam regarding the document to be presented at the General Convention held in Nepalgunj in 2054 Magh was particularly evident. General Secretary Nepal had accused Gautam of reflecting 'Mondale nationalism' in the document prepared by him. Gautam's document stated that the main issue in the Mahakali Treaty was treason. The majority of the UML, including Nepal, was not ready to accept that.

Gautam had accused General Secretary Nepal of not having a clear view of America and India in his document. In his document, he called America 'imperialist' and India 'regional hegemonist'. Gautam had been of the opinion that the revolutionaries in the UML were being sidelined. In the discussions held in various parts of the country in favor of both documents before the general convention, the leaders not only criticized each other, but also made statements in the style of insults. Both documents were presented at the general convention. The document presented by Nepal, the establishment party, was passed by an overwhelming majority at the general convention.

Gautam's document was called a minority document. Due to the disagreement between the divided leaders and activists over the document, the police even lathi-charged the Gautam party activists at the general convention. A Gautam supporter activist was injured and admitted to the hospital. Some UML leaders and activists were angry with the establishment party after the general convention rejected their document and the police attacked the activists with batons. On the one hand, factional differences on the other hand, as the possibility of defeat became more likely, the Gautam faction did not field candidates in the party elections. After not fielding candidates, all the leaders of the Gautam faction had left the mainstream of the party.

The UML general convention had elected Manmohan Adhikari as the president and Nepal as the general secretary. The Gautam faction, which was not included in the election process of the general convention, had finally decided to split the party. According to the same decision, a separate parliamentary party consisting of 46 MPs was formed. The name of the party was proposed as CPN (ML) and informed to Speaker Ramchandra Poudel. Speaker Poudel had given recognition to a separate parliamentary party by pasting a notice on 22 Falgun 2054. After receiving recognition as a separate party, the UML was formally divided. UML had 89 MPs in the House of Representatives and 12 in the National Assembly. Out of 101 MPs, 46 had joined the new party. 40 MPs from the House of Representatives and 6 from the National Assembly had joined Male. Speaker Poudel had informed that the separate party had been recognized as it had reached the required number according to the Party Defection Act.

Before the new party was recognized, UML Chairman Adhikari had informed that Gautam and other MPs had been expelled from the party. But Speaker Poudel had said that the UML's information was not relevant according to the Party Defection Act. Gautam's party had also tried to become the main opposition by gaining 51 percent of the MPs. But since that was not possible, only a separate party was formed. UML Chairman Adhikari had submitted a written demand to the Speaker before the recognition of the MPs. But Speaker Poudel had called Adhikari's demand an unauthorized demand.

Speaker Poudel had responded that he was saddened by the party split. But he said that he had gone through the process according to the act. After the UML split, it also had an impact on the lower organizations of the party. Especially, the division began in the mass organizations and lower-level party committees. The UML split, which was less ideological and more affected by factional interests, had also started to have a mathematical impact in the parliament. Because, the Lokendra Bahadur Chand faction of the Rastriya Prajatantra Party had also received recognition as a separate party in the parliament. The RPP, on the other hand, had clearly split due to differences arising from power interests.

The split of the UML, the largest party in the country based on the number of seats it won in the parliamentary elections, caused a great stir in national politics. The split caused great damage when the UML was putting forward the slogan of forming a majority government in the upcoming elections. Leaders of various parties had called the UML split tragic.

Kantipur Daily published a news story focusing on the split of the UML parliamentary party and its recognition as a new party on 23 Falgun 2011 under the title ‘UML split into two: CPN-ML recognized as a separate party in Parliament’. On the same day, another news story was also published under the title ‘Events of UML split’.