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Pakistan's Musharraf to resign as president: report

2 hours, 56 minutes ago

Pakistan's President Pervez Musharraf will resign rather than face
impeachment by parliament, the Financial Times said on its Web site,
citing government officials and a member of his circle.

The paper quoted an unidentified senior Pakistani government member as
saying a deal had been brokered between Musharraf and members of the
newly elected coalition government.

"The president will neither be impeached nor prosecuted on any charges.
He will try and stay in Pakistan," the paper quoted the official as saying.

Speculation has been rife Musharraf would quit rather than face
impeachment for misrule, though his spokesman, who was not immediately
available for comment, has repeatedly denied that.

The long-running crisis surrounding Musharraf's future has heightened
concern in the United States and among other allies about the stability
of the nuclear-armed Muslim state, which is in the front line of the
campaign against militancy.

Musharraf, a close U.S. ally, has been under pressure to quit from the
ruling government coalition, led by the party of assassinated former
Prime Minister Benazir Bhutto. It said last week it planned to impeach him.

In Washington, White House spokeswoman Dana Perino referred to the
report as a "rumor mill."

"We've heard the reports and we continue to monitor it," she said,
adding that the United States considered the leadership of Pakistan an
issue for Pakistanis.

Former army chief Musharraf seized power in a 1999 coup but has been
isolated since his allies lost a February election.

A Pakistani newspaper this week said Musharraf was expected to announce
a decision to step down on Independence Day on Thursday. Instead,
Musharraf issued a call for reconciliation, which he said was essential
to tackle mounting economic problems and Islamist militancy.

That appeal apparently failed to check government attempts to force him
from power, with one senior coalition official saying preparations to
impeach the president were on track.

ARMY'S ROLE

The political uncertainty is unnerving investors, with the rupee setting
a new low of around 75.05/15 to the dollar on Wednesday and stocks
hovering near two-year lows.

Financial markets were closed on Thursday.

The Financial Times said Musharraf had demanded he be allowed to retire
to his farm in Islamabad and that there be no moves to prosecute him
once out of office,

It quoted a senior government official as saying Pakistan's powerful
army had insisted Musharraf's demands be met.

Coalition leaders said this week the army, which has ruled for more than
half the country's history since its founding in 1947, would not
intervene to back its old boss.

Analysts say the army is loathe to step back into the political fray and
is unlikely to take any action against the government on Musharraf's behalf.

Reports have cited army commander General Ashfaq Kayani, who Musharraf
chose to succeed him when he gave up command last year, as saying he
wanted to avoid the controversy over Musharraf.

Asked about the possibility of a military coup in Pakistan, Perino said:
"I haven't heard of a military coup ... But I think if they are be
moving forward on impeachment proceedings it seems to be within their
constitution."

(Additional reporting by Jon Boyle in London, Tabassum Zakaria in
Washington; Editing by Robert Birsel)

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