Thanks axara for the useful website, it seems that I do not need transit visa since I have valid visa for Canada. Although Nepal is in the list of trnsit visa required countries there is rule for exemption for certain cases. Below is the stament fro the wbsite http://www.ukvisas.gov.uk/en/doineedvisa/visadatvnationals:

Passengers exempt from the DATV requirement

Holders of certain documents are, regardless of nationality, exempt from the requirement to hold a Direct Airside Transit Visa when transiting the UK.

A transit passenger is not required to hold a transit visa if he holds or a person with whom he arrives in the United Kingdom holds on his behalf:

1. A valid visa for entry to Australia, Canada, New Zealand or the United States of America and a valid airline ticket for travel via the United Kingdom as part of a journey from another country or territory to the country in respect of which the visa is held;