KATHMANDU, Sept 9 (Reuters) - Nepal's largest political party will campaign against the Himalayan nation's embattled monarchy in this year's elections, ending its traditional support for the king, a senior party leader said on Sunday.

Nepal has set elections for Nov. 22 for a constituent assembly to prepare a new constitution and decide whether to retain the monarchy or turn the impoverished nation into a republic.

"We have chosen for a republican path and we'll campaign for the sovereignty of the people," said Chakra Bastola, a senior leader of the centrist Nepali Congress party, the country's largest political group.

Bastola, head of a panel in charge of preparing the election manifesto, said a general convention of the party had been called this month which was expected to approve the slogan.

The comments came as a latest blow to the centuries-old monarchy in a country which traditionally considered the king as an incarnation of Hindu god Vishnu.

The popularity of the monarch plunged after King Gyanendra sacked the government and took over absolute powers in 2005 only to bow down to weeks of street protests organised by political parties and supported by anti-monarchy Maoists rebels last year.

The Nepali Congress party was formed 60 years ago and had been fighting for the constitutional monarchy in a multi-party parliamentary democracy.

Other mainstream parties are already campaigning for a republic while the Maoists insist that the country should be declared a republic before the polls.

The Maoists have vowed to launch street protests from Sept. 18 to press for their demand.

The November elections are expected to cap a peace process with the Maoists who joined a provisional parliament and the government this year after confining their fighters to camps and locking up weapons in U.N. monitored containers.

The deal ended a decade-long Maoist civil war that killed more than 13,000 people.

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