AFP/ Kathmandu

Nepal's foreign ministry on Monday said the government was ready to amend the country's new constitution and resolve its long-simmering dispute with protesters in a move welcomed by neighbouring India.

More than 50 people have been killed in clashes between police and people protesting against the constitution, which was introduced in September after a devastating earthquake pushed warring political parties to reach an agreement.

Demonstrators from the Madhesi ethnic minority, mainly from Nepal's southern plains, have been blockading the main Birgunj border crossing with India, saying the constitution leaves them politically marginalised.

In a statement released a day after police killed a protester in fresh clashes, the foreign ministry said the cabinet had agreed to support a constitutional amendment bill that would increase the Madhesi presence in government bodies through proportional representation.

"The process for the adoption of the constitution amendment bill tabled in the parliament will be advanced in order to ensure the participation in the state organs on the basis of proportionate inclusiveness," the statement said.

The protesters also want lawmakers to amend the country's internal borders laid out in the charter which they say will leave them under-represented in the national parliament.

"With regard to the demarcation of provinces... a political mechanism will be constituted, which will submit its report along with recommendations within three months," the statement said.

Landlocked Nepal is heavily dependent on India for fuel and other supplies, but little cargo has crossed the border since the protests broke out, prompting Kathmandu to accuse New Delhi -- which has criticised the new constitution -- of imposing an "unofficial blockade".

New Delhi has denied the charge and urged Nepal to hold talks with the Madhesis, who share close cultural, linguistic and family links with Indians living across the border.

Protesting Madhesi parties declined to comment on the cabinet decision which was hailed by India as a "positive step that (will) help create the basis for a resolution of the current impasse in Nepal".

"We urge all Nepali political forces to now demonstrate the necessary maturity and flexibility to find a satisfactory solution to the Constitutional issues through constructive dialogue in an agreed timeframe," India's foreign ministry said in a statement.

"We are confident that a return to normalcy in Nepal would create a more secure and predictable climate for unimpeded commerce between our two countries."

The constitution was meant to end years of inequality and cement peace, marking the final stage in a peace process that began when Maoist rebels laid down their arms in 2006 after a decade-long insurgency.