ISLAMABAD Pakistan's government agreed on Monday to reinstate Iftikhar Chaudhry as chief justice to defuse a political crisis and end a street agitation that was threatening to turn into violent confrontation, officials said.
Chaudhry became a cause celebre after being dismissed in late 2007 by then-president and army chief General Pervez Musharraf.
"Chaudhry will be restored, and there will also be a constitutional package," a government official with knowledge of the deal told Reuters.
President Asif Ali Zardari, who was elected by parliament six months ago, had feared the judge could wage a vendetta against Musharraf that could also threaten his own position.
His retreat on the issue will raise inevitable question marks over his future, while it will enhance the reputation of his chief rival, former prime minister Nawaz Sharif.
Several hundred jubilant lawyers and activists gathered outside Chaudhry's Islamabad residence, which he refused to vacate after his dismissal when Musharraf declared emergency rule in a desperate move to extend his presidency for another term.
They danced and chanted "Long live the chief justice."
"He has to forget the past. He has to forget the conduct of those who were apparently against him as well as us," retired judge Tariq Mehmud, a leader of the lawyers' campaign, told Reuters.
"It's victory for those who fought for independence of judiciary and it's the first time in the history of Pakistan that a movement launched by middle class has proved successful."
The political crisis gripping the Muslim nation has alarmed the United States and Britain, which fear any slide into chaos would help the Taliban and al Qaeda become stronger in Pakistan.
Western diplomats had tried to make Zardari pull out of a collision that could destabilize the year-old civilian coalition and force a reluctant army chief, General Ashfaq Kayani, to intervene.
Sharif, a two-time prime minister with a conservative, religious nationalist support base, had backed a lawyers' movement fighting for the independence of the judiciary.
His government was overthrown by Musharraf in 1999, and since his return from exile in late 2007 he has become Pakistan's most popular politician, thanks partly to his stand over the judge.
Zardari finally conceded as the opposition leader and the lawyers held a day of protest in Lahore on Sunday, and set off for Islamabad for the climax of a series of protests they had dubbed "the Long March."
To stop them driving into Islamabad, authorities positioned containers and trucks across roads outside the capital.
Paramilitary troops are camped in a city sports complex and deployed at entry points, while, officials say, the army has been put on stand-by.
A senior leader in Sharif's Pakistan Muslim League (Nawaz) (PML-N) party confirmed the breakthrough, as the convoy halted at Gujranwala, a town around 60 km north of Lahore.
"The message we got is that the government has decided to restore chief justice Chaudhry and they are going to announce it shortly," Khawaja Asif told Reuters. "There will be a very comprehensive package," he said.
There were scenes of jubilation in Gujranwala as the news spread of Chaudhry's reinstatement.
The government had been offering concessions earlier, but Sharif refused to accept anything less than Chaudhry's restoration.
Sharif latched onto Chaudhry's cause two years ago, but the current crisis began when Zardari ejected the PML-N from power in Punjab last month, after the Supreme Court barred Sharif and his younger brother Shahbaz from holding elected office.
The constitutional package being worked out was expected to include the formation of a commission to review judicial appointments and the lifting of central government rule in Punjab, setting the stage for the provincial assembly to elect a chief minister.
Zardari, widower of assassinated former prime minister Benazir Bhutto, was elected by parliament last September after forcing Musharraf to quit the presidency.
Deeply unpopular, Zardari's image was further damaged when he broke a public promise to Sharif last year to reappoint Chaudhry, though he reappointed most other judges axed by Musharraf.
Prime Minister Yousaf Raza Gilani was due to address the nation on state-run television shortly.
"The Prime Minister's announcement will only reinforce the government's commitment to reconciliation in accordance with the constitution and the spirit of democracy," said Farahnaz Ispahani, a spokeswoman for Zardari's party.
(Additional reporting by Zeeshan Haider; Writing by Simon Cameron-Moore; Editing by John Chalmers and Jeremy Laurence)