Pakistan Musharraf won't step down: spokesman

By Kamran Haider

ISLAMABAD (Reuters) - Pakistan's beleaguered President Pervez Musharraf will not resign, his spokesman said on Monday, as the ruling coalition prepared to launch a bid to impeach the prominent U.S. ally.

Former army chief Musharraf has since early last year been at the centre of a political crisis that has raised fears for the stability of the nuclear-armed country on the front-line of the U.S.-led campaign against militancy.

A coalition government led by the party of assassinated former prime minister Benazir Bhutto announced on Thursday that it would impeach Musharraf for plunging Pakistan into a political and economic mess during his nearly nine-year rule.

Pro-government lawmakers on Monday passed a resolution in the assembly of Punjab, the country's biggest province, saying that Musharraf had lost the confidence of the people and should step down or face impeachment.

Similar resolutions will be passed in the remaining three provincial assemblies this week before an impeachment motion is filed in the National Assembly later this month.

Analysts said it could take several weeks before the motion is voted upon in the joint sitting of the two-chambered national parliament.

There has been speculation in the media that the former commando would step down to avoid impeachment but his spokesman, retired Major General Rashid Qureshi, angrily dismissed that.

"There's no such thing. You'd better ask those who say he's going to resign," Qureshi said.

Musharraf seized power in a 1999 coup and the driving force behind moves to oust him now has for months been Nawaz Sharif, the prime minister ousted in 1999 and leader of the second-biggest party in the coalition.

A president has never been impeached in Pakistan but political analysts said a move against Musharraf looked inevitable unless he stepped down.

MARKET REACTION

Pakistan's latest political roiling have not affected its rating with rating agency Moody's which said on Monday it would keep its B2 (stable outlook) rating for Pakistan as this adequately captured the political risk the country was facing.

Moody's downgraded Pakistan's rating to B2 from B1 in May because of growing economic imbalances and the political difficulties plaguing the country.

The country's benchmark stock index though, is trading just off year lows, with the market jittery about the political turmoil while the Pakistani rupee fell in early trade Monday for the same reasons.

Top officials from Pakistan's two main coalition partners met on Monday to draw up a list of accusations to be leveled against Musharraf.