Charges drawn up against Musharraf

Pakistan's President Pervez Musharraf attends the European Parliament in Brussels in this January 21, 2008 file photo.

ISLAMABAD (Reuters) - Pakistan's ruling coalition has prepared impeachment charges against President Pervez Musharraf focusing on violation of the constitution and misconduct, a coalition official said on Saturday.

Speculation has been mounting that former army chief and firm U.S. ally Musharraf would quit after the coalition government, led by the party of assassinated former prime minister Benazir Bhutto, said last week it planned to impeach him.

The president's spokesman has insisted Musharraf would not resign but would face the accusations. He dismissed as malicious reports of the president's imminent resignation and said they were damaging the economy.

But negotiations on an exit for the president have been going on, officials have said, while media have reported important ally Saudi Arabia has been trying to help mediate a solution.

A coalition team has finished drafting impeachment charges and handed them to the minister of law for scrutiny, said Ahsan Iqbal, a member of the drafting team.

"There is a long list of charges against him ... we will file them, by the latest, by Tuesday," Iqbal told Reuters.

Iqbal is a senior official of the second biggest coalition party, led by former prime minister Nawaz Sharif.

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

Political uncertainty has also sapped investor confidence. The rupee weakening on Saturday to another record low against the dollar, at about 76.60/65, the fifth straight session of record lows.

Pakistani stocks, which surged under Musharraf's rule until this year, have been hovering near two-year lows but rose 3.6 percent on Friday as investors cheered rumours of his departure, a move they viewed as a milestone that would ease political tension.

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Musharraf seized power in a 1999 coup. His popularity began to evaporate last year when he clashed with the judiciary and imposed a six-week stint of emergency rule to thwart opposition to his efforts to secure another term.

Iqbal said Musharraf's Nov. 3 imposition of emergency rule was a main charge on the list.

Coalition officials have hoped Musharraf would resign rather than face impeachment, and Foreign Minister Shah Mahmood Qureshi, a senior official of Bhutto's party, said on Saturday time was running out for the president to take a decision before the impeachment process was set in motion.

"I think he will have to take this decision today or tomorrow ... if he resigns then there will be no need for the impeachment process," Qureshi told reporters in Multan, his hometown.

Tariq Azeem Khan, a politician close to Musharraf and a former deputy government minister, said on Friday "well-wishers" were trying to ensure the matter was settled through talks rather than by impeachment.

The U.S. embassy has not commented on reports its ambassador has been involved in negotiations, while the British High Commission has denied reports a former British ambassador had been mediating.

Government officials and Musharraf's spokesman both denied media reports Saudi Arabian intelligence chief, Prince Muqrin bin Abdul-Aziz, who mediated in Pakistan's political crisis last year, had visited on Friday.

Muqrin met Musharraf and his main adversary Sharif, the prime minister Musharraf ousted in 1999, media reported.

Sharif has adamantly opposed indemnity for Musharraf if he does resign. Bhutto's party says the question of whether Musharraf should be put on trial should be left to parliament.

As pressure has mounted on Musharraf, questions have been raised about the reaction of the army, which has ruled for more than half the country's history since its founding in 1947.

Qureshi said both the army and the United States had said they would respect Pakistan's constitution and had kept away from the process. Analysts say the army is loath to step into the fray.

(Additional reporting by Augustine Anthony)