http://www.bbc.co.uk/news/world-asia-22213812
A government committee is in London to look into the viability of selling the Victorian villa, which it only pays a small amount to lease.
It is in one of the UK's most expensive roads in central London.
The Nepalese government says the committee is only fact-finding and no decisions have been made.
"I want to make it clear to you that the government has not taken any decision, so it all depends on the recommendation of the team," said Nepalese foreign ministry spokesman Arjun Thapa.
The house in Kensington Palace Gardens is on the same road as mansions owned by the billionaire Lakshmi Mittal and the Sultan of Brunei.
One property expert says the villa is worth about $153m (£100m).
UK Nepalese community leaders say the embassy was given because of strong ties between Nepal and Britain, and it should be kept
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