Maoist chief Prachanda has inked a multi-billion dollar deal with a China-backed firm to transform Lumbini, the birth place of Buddha located close to the Indian border, into an international tourist hub and a 'Mecca' for Buddhist pilgrims.

Prachanda, who is also co-chairman of the Lumbini Development National Directive Committee of Nepal (LDNDC), and Executive vice-chairman of the Hong Kong-based Foundation Xiao Wunan signed the MoU at a function yesterday to go ahead with the master plan to build Lumbini in to a "world peace city".

However, the media was not allowed during the signing of the important MoU between Prachanda and the Chinese official.

The project aims to build infrastructure surrounding Lumbini, a UNESCO World Heritage Site, situated in western Nepal to attract Buddhist pilgrims from around the world.

The two sides, however, did not give details of the agreement and the total amount that the APECF is willing to spend for the purpose. According to unofficial sources an estimated USD 3 to 5 billion will be spent on the project.

A few months ago, the government had formed the LDNDC under Prachanda to garner internal support for the development of the Lumbini project, which drew criticism from the Buddhist community in the country for not consulting with them.

The community said the plan is an attempt to commercialise the sacred place without their consent.

The LDNDC, a Cabinet-formed body that has a four-year mandate, and has members from the Nepali Congress and the CPN-UML, the main opposition parties, as well.

Addressing the function, Prachanda said a strategic partnership should be formed between Nepal, India and China through Lumibini.

"The three countries can and should join hands for a strategic partnership through Lumbini for the development of the whole of Asia," he said.