Pakistan coalition fails to break judges deadlock

By Zeeshan Haider

ISLAMABAD (Reuters) - Pakistan's ruling alliance failed to break the deadlock on reinstating judges sacked by President Pervez Musharraf during talks in London on Friday, rekindling speculation the month-old coalition might collapse.

The restoration of the judges has been the top issue for the coalition, led by the party of assassinated former prime minister Benazir Bhutto since its inception.

Musharraf dismissed around 60 judges after imposing a six-week emergency rule in November to try to pre-empt a ruling against his re-election in October while still army chief. It remains a possibility that if reinstated, the judges could revive the case against his re-election.

Asif Ali Zardari, Bhutto's widower and her political successor, held talks with former prime minister Nawaz Sharif, the second major partner in the coalition, for several hours in London to try to bridge their differences over the issue.

But Sharif, who is in London for medical treatment for his wife, said they failed reach agreement.

"Basically there are certain points where there have been differences. We haven't been able to resolve them yet," Sharif told reporters in comments aired on Pakistani television.

Both leaders had signed a pact in March to reinstate the judges by April 30, but later extended the deadline to May 12 to save the coalition.

Asked what he planned to do next, Sharif said: "I'm going back to Pakistan tomorrow and then I will speak ... we will wait until May 12."

Sharif's aides had previously said their ministers would quit the cabinet if the judges were not reinstated, but that they would continue to support the government from outside.

INSTABILITY

Critics fear the failure to move forward has diverted the government's attention from more pressing issues such as the sharp decline of the Pakistani rupee, rising inflation and the fight against Islamist militancy.

The rupee slumped 3.5 percent against the dollar on Friday, under pressure from a rising oil import bill and fears that the country was mired in political and economic instability.

Western allies in the U.S.-led war on terrorism dread nuclear-armed Pakistan sliding into prolonged instability.

Zardari flew to London on Thursday to meet Sharif after their aides failed to patch up the differences in Pakistan.

The two, neither of whom are members of the government or parliament, also met in Dubai last week for talks on the issue.