The dramatic turnaround in the country's politics came after top leaders of the coalition partners met at the residence of the Maoist chief Prachanda and decided not to withdraw support to the government "for the time being".
It has not been disclosed what type of understanding the Maoists have reached with Oli's party to change its earlier decision.
A Maoist leader said: "Our party has decided to wait for now given that there are some legal complications in registering the no confidence motion against this government. The coalition will remain intact now."
Addressing Parliament, Oli refuted reports that he was planning to dissolve the House in the wake of possible withdrawal of support to the seven-month-old coalition government by UCPN-Maoist.
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"There is no truth in the rumour about dissolving the Parliament. It is totally baseless," he said.
In his address, 64-year-old Oli also called the main opposition party Nepali Congress and other parties to seek solution to all the problems through parliamentary exercise.
The issue related to re-demarcation of the boundary will be decided through a high-level commission and the issue related to inclusiveness of all sections of the society has been addressed through amendment to the Constitution, he said.
Oli, however, rejected the demand made by a section of political groups which are raising the issue of re-writing the new Constitution, apparently referring to Madhesis who are not happy with the statute approved in September.
"There is no provision to re-write the constitution as the constituent assembly has already been transformed into a Parliament, which has no authority to do so. However, we can amend the Constitution time and again to incorporate grievances of the disgruntled groups," he said.
"The remaining grievances could be resolved through dialogue and talks. There is no good alternative to dialogue and agreement. The government wants to resolve all the problems through dialogue," he said.