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By Gopal Sharma

KATHMANDU, June 15 (Reuters) - A car gifted by Adolf Hitler to a Nepali king is likely to be displayed in a palace museum after the Himalayan nation abolished the 239-year-old monarchy and the ousted King Gyanendra quit the palace.

Officials said a 1939 Mercedes Benz presented by the Nazi leader to King Tribhuvan, Gyanendra's grandfather, is now rusting at Nepal's main Narayanhiti palace grounds.

It has lain there for more than three years after an engineering college in Kathmandu, which was using it to train mechanics, said it did not have enough money and spare parts to restore the antique car.

But now efforts are being made to display the car in the palace, which the government is turning into a museum.

On Sunday, Prime Minister Girija Prasad Koirala, 83, attended the first public function ever organised inside the palace. Former Maoist leaders, who waged a decade-long civil war to overthrow the king, were also present.

Koirala said Nepal should be proud that the king had left the palace without bloodshed after the republic was declared.

"This is a historic and unprecedented event," he said, as Nepal's new national flag was hoisted. "The world is watching us with awe and respect at this moment."

A sign reading "Narayanhiti Palace Museum" was also unveiled, formally turning the palace into a museum.

A special assembly elected in April overwhelmingly voted to abolish the monarchy last month and gave Gyanendra 15 days to vacate the pink pagoda-roofed palace, which he did last week.

VINTAGE CAR

Earlier, Govinda Prasad Kusum, a senior bureaucrat preparing an inventory of the property and other valuables of Gyanendra, which will be in possession of the government, said the vintage car should be displayed at the museum. "The car will be a major attraction there," he said.

The car was manually carried by scores of labourers for several days from Nepal's southern plains to Kathmandu in 1940, when the mountainous country had no roads.

Tribhuvan used the car when the Kathmandu valley had no other motor transport.

But after his death in the 1950s, the car gathered dust in the premises of the Thapathali Engineering Campus which used it as a model to train the mechanics there.

Its hood and doors are coming off, the inside of the bonnet is rusting and seats are torn, an official said.

Nepal, wedged in the central Himalayas between China and India, opened up to modern development in the 1950s.

It has a more than 500,000 vehicles including motorcycles, running in a road network of about 17,000 kilometres (10,625 miles) now. (Editing by Catherine Evans)

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