The panel appears and it says "Package Manager Console Host version 3.2.0.10515" and "Initializing PowerShell host..." It stays like this and I have to shut down VS using the Task Manager.
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Hey @John-H, did you manage to fix this? I've got almost the same version - 3.2.0.10516 and precisely the same symptoms.. Gragh! – danodonovan Nov 09 '15 at 09:57
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Microsoft has published a hotfix for that issue, here is information how to apply it:
Here is the Link
Or This command line can be used to automate the process (run as admin), until issue is fixed:
reg delete HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\PowerShell /v ExecutionPolicy /f

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Krsna Kishore
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This didn't work. I have NuGet Package Manager version 3.2.6, which is newer than the hotfix. I don't have the PowerShell registry path. I am using Windows 10 and also had the same problem in Windows 7. – John H Oct 01 '15 at 16:05
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@JohnH Check this [link](http://blog.jsinh.in/nuget-install-update-error-failed-to-initialize-the-powershell-host/#.Vg1kbeyqqko) – Krsna Kishore Oct 01 '15 at 16:51