Swiss aid workers have condemned a new code of conduct aimed at aid organisations in Nepal saying it could severely hamper development activities.
On November 10, the Nepalese government introduced the controversial code, which prevents non-governmental organisations (NGOs) from taking part in political activities and disseminating information.
"If this code of conduct is followed through to the letter, we could find it impossible to work in many parts of the country. That's what we fear," Jörg Frieden of the Swiss Agency for Development and Cooperation (SDC) in Nepal told swissinfo.
"Many national and international NGO programmes could be frozen."
The code comes nine months after King Gyanendra seized direct control of the government, which says the rules are aimed at making the work of NGOs respected and dignified.
In a letter to the government, the United Nations resident coordinator in Nepal, Matthew Kahane, has urged officials to withdraw the code and revisit the issue, on behalf of several embassies and aid agencies - including the SDC.
"It is inconsistent with Nepal's commitments and obligations under the International Covenant on Civil and Political Rights and other international human rights instruments," the letter stated.
A number of international human rights organisations, including the United States-based Human Rights Watch, have condemned the code saying it violates democratic principles including freedom of expression.
In a statement, Human Rights Watch called the code a legal veneer for repressing civil society.
An immediate concern is the ability to continue assisting people living in the Himalayan kingdom's troubled remote areas.
"In this situation of conflict the work of NGOs that are independent from the state is essential in order to reach people who are not controlled by the government," Frieden said.
Remote areas of Nepal have been hit hard by the ongoing struggle between government forces and Maoist insurgents, who have been fighting to topple the monarchy since 1996. The conflict has cost some 11,000 lives.
Frieden believes NGOs need to improve in the areas of governance, accountability and transparency but added that the code should be the result of direct consultations with the organisations involved.
"Many people do not trust international and national NGOs, as well as development agencies, and we do not question the need for greater transparency and accountability to the people.
"The NGOs are ready to work in that direction, but the process must come from the bottom up," said Frieden.
On Friday, Arjun Karki, chairman of the NGO Federation of Nepal, which represents some 2,600 development agencies across the country, said the federation would defy the new code and launch nationwide protests.
At a meeting of 300 delegates from NGOs around the country Karki said the government had introduced the new code with a view to exerting total control on the independent NGO sector.
Nepal's social welfare minister, Durga Shrestha, has said that any NGO not following the code will face legal action.
swissinfo, Karin Kamp and Billi Bierling in Kathmandu
Nepal is one of the poorest countries in the world with an annual per capita income of SFr274 (in 2002).
It is a priority country for Swiss development agencies, which have worked there for 40 years.
Following a coup by King Gyanendra on February 1, Switzerland is reviewing its aid activities in Nepal.
Earlier this year, Nepal agreed to the UN Commission on Human Rights sending observers.
The Nepalese government has introduced a code preventing NGOs from being politically active and distributing information.
It says the rules are designed to make the work of NGOs more dignified and respected.
The SDC and the United Nations, as well as other international bodies, have voiced their concern to the authorities.
The government says that any groups not obeying the new code will face legal action.