Zardari unveils plan to drive Musharraf from power

(Adds fresh quotes, background)

By Simon Cameron-Moore

ISLAMABAD, May 24 (Reuters) - The head of the party leading Pakistan's ruling coalition unveiled proposed constitutional changes on Saturday that would take away President Pervez Musharraf's powers.

"We intend to walk him away, rather than impeach him away," said Asif Ali Zardari, who succeeded his late wife Benazir Bhutto as leader of the Pakistan People's Party after her assassination last December.

Zardari said the amendments would remove the president's right to dismiss the government and pass responsibility for appointing heads of the armed services and provincial governors to the prime minister.

The proposed amendments included a bar on a president running for office for more than two terms.

The PPP has to consult its three coalition allies over the 62 proposed amendments, that could be put before parliament by the end of June.

The coalition allies defeated pro-Musharraf parties in a general election in February, and a government was sworn in at the end of March under Prime Minister Yousaf Raza Gilani, a PPP loyalist picked by Zardari.

Constitutional changes are passed through the National Assembly and Senate, and the coalition partners lack the required two-thirds majority in the combined houses.

Senate elections are due at the end of the year, and many analysts expect the struggle between Pakistan's main political parties and Musharraf, who came to power in a 1999 coup, to come to a head then.

The United States has been closely involved in Pakistan's political transition.

Some political analysts believe Washington has tried to prop up Musharraf out of fear that his sudden departure could lead to instability in the nuclear armed state and hinder the campaign to wipe out al Qaeda.



BATTLE LINES

How to tackle U.S. ally Musharraf has already led to strains within the coalition.

Nawaz Sharif, the prime minister overthrown by Musharraf, pulled nine ministers from his party out of the cabinet two weeks ago to protest against the PPP's failure to reinstate judges Musharraf dismissed during a brief phase of emergency rule last November.

Sharif's party has maintained support for the PPP-led government without being part of it.

The legality of Musharraf's re-election last October while still army chief by the outgoing parliament was being challenged in the Supreme Court when Musharraf purged the judiciary.

Zardari said the PPP had "never accepted General Musharraf as a constitutional president" but had kept a working relationship and would consult him over the constitutional package.

Musharraf's foes have talked of impeaching him for invoking emergency rule on Nov. 3, but Zardari has been wary of provoking Musharraf while he still possesses sweeping powers.

Political uncertainty has taken its toll on investor confidence in Pakistan.

The Karachi Stock Exchange's 100-share index ended Friday more than 17 percent below the record high struck on April 21, largely because of doubts about the PPP's ability to work in harness with Sharif's Pakistan Muslim League (Nawaz).

There had been speculation that Zardari would risk splitting his own party by turning to the pro-Musharraf parties for support if Sharif's PML-N withdrew backing for the government.

On Saturday Zardari sought to dispel any doubts over who the PPP intended to work with, saying: "Once this package is tabled in the parliament, then the lines will be clearly drawn that (show) who is with who." (Additional reporting by Zeeshan Haider)