Ruling Pakistan party says to cut Musharraf's power

ISLAMABAD (Reuters) - Pakistan's ruling party has said it is determined to curtail the powers of the presidency in favor of parliament, whether President Pervez Musharraf likes it or not.

Staunch U.S. ally Musharraf, facing a chorus of calls to resign, told journalists on Saturday, in his first meeting with the media for weeks, that he had no plan to quit.

At the same time, Musharraf sounded a generally conciliatory tone saying parliament, dominated by opponents since his allies were defeated in a February election, was supreme.

Musharraf's fate has consumed the attention of the new coalition since the polls, despite an economy that is deteriorating rapidly and a potent threat from al Qaeda and the Taliban.

Pakistan's stock market and currency have both come under pressure because of a combination of factors, including the uncertainty over Musharraf and worry about more turmoil in the nuclear-armed country.

Musharraf said Saturday he would accept proposed constitutional amendments the ruling Pakistan People's Party (PPP) of assassinated former Prime Minister Benazir Bhutto aimed to push through parliament.

But in what media interpreted as a warning he would not tolerate a cut in his powers, a confident-sounding Musharraf indicated he would not like to be reduced to a ceremonial head of state, saying he could not become a "useless vegetable."

The People's Party brushed aside any objections, saying parliament was sovereign and could make or amend laws and the constitution regardless of whether Musharraf liked it or not.

"Such hollow warnings would not deter the democratic forces from restoring the powers of the parliament," PPP spokesman Farhatullah Babar said in a statement.

Pakistan's new ambassador to the United States, Husain Haqqani, said Musharraf should not be forced.

"The theme of Benazir Bhutto was always reconciliation. I don't think that General Musharraf should be pushed out," Haqqani told CNN's Late Edition.

"I think at the same time General Musharraf also needs to show statesmanship. Pakistanis need to come together, we have big problems, economic problems and above all the problem of terrorism, which Ms. Bhutto felt very strongly about," he said.

"The time has come for a negotiated settlement about restoring Pakistan's constitution and allowing the political processes to continue."

"UNCONSTITUTIONAL PRESIDENT"

Bhutto's husband, Asif Ali Zardari, who leads her party, on Thursday reiterated that Musharraf's re-election for a second term in October while remaining army chief was unconstitutional and his government was keeping relationship with him because of his de facto position.

"PPP does not accept General Musharraf as constitutional president," he told Pakistani reporters in Saudi Arabia in comments broadcast by a television channel. "Nonetheless, PPP government does have a working relationship with him (Musharraf) because he occupies a position by default and by circumstances."

Nawaz Sharif, the prime minister Musharraf overthrew as army chief in a 1999 coup and who leads the second largest party in parliament, wants Musharraf impeached or tried for treason.

Sharif's brother, Shahbaz, was elected on Sunday as chief minister of Punjab, the country's richest and politically most important province.

Another looming challenge to Musharraf is a lawyers' movement that sprang up last year to fight his attempts to dictate to the judiciary. It is seeking to hasten his departure with a countrywide protest this week.

Musharraf is believed to be seeking immunity for suspending the constitution and imposing emergency rule for six weeks in November. The PPP leadership, wary of a destabilizing confrontation, is trying to make his exit "dignified," according to a Zardari adviser.

Despite Musharraf's public stance, political insiders say he recognizes that he will have to quit rather than be the cause of more upheaval, and it has become a matter of timing.

But the Dawn newspaper said on Sunday Musharraf appeared confident, perhaps because he had been assured he did not have to worry about impeachment: "He does not seem under pressure to go away in a hurry."

(Additional reporting by Zeeshan Haider; Editing by Charles Dick)