ISLAMABAD, Sep 19 (Reuters) Pakistan's President Pervez Musharraf is taking a big gamble by saying he will quit as army chief, as he may end up sharing power with an independent-minded prime minister, like self-exiled former premier Benazir Bhutto.
Many analysts predict the mix of two such strong personalities will be combustible, and Musharraf's position will be critically weakened once he leaves the army, his main support base since coming to power in a coup eight years ago.
Even so, Musharraf's lawyer served notice to the Supreme Court this week that he will retire as army chief, provided legal challenges are overcome and parliament re-elects him president next month.
The US ally, whose popularity has slumped, says he will be sworn in for a second five-year term in November as a civilian, heralding yet another transition phase for a country ruled by generals for half the time since its 1947 founding.
A general election should be held by mid-January, after which a new ruling coalition will have to be formed.
According to opinion polls, parties in the current coalition supporting Musharraf will be the biggest losers, but they could become junior partners in power if an alliance is formed with Bhutto's Pakistan People's Party (PPP).
Whether the Supreme Court, regarded as hostile to Musharraf since an unsuccessful attempt to sack its top judge last March, lets the president go ahead with re-election hangs in the balance.
''For the Supreme Court to accept this -- for him to get elected in uniform and then take it off once he's elected -- I think it's a tough one,'' Asad Durrani, a retired general and former head of the Inter-Services Intelligence spy agency.
Bhutto, in an interview with Reuters yesterday, was noncommittal whether she would go along with the plan by which Musharraf was seeking to secure his presidency.
''The Pakistan People's Party wants to support General Musharraf if he takes the country towards democracy but we do not want to bail out military dictatorship,'' said the two-time prime minister and head of the country's largest political party.
The two continue to play a brinkmanship game after months negotiating over a possible post-election power-sharing arrangement, though Bhutto has already made plans to end more than eight years of exile by returning to Karachi on October 18.
PASSING COMMAND Though Musharraf seems reconciled to meeting a constitutional obligation to step down as army chief by the year-end, he will be choosing his own successor at general headquarters in Rawalpindi.
Pakistani leaders, however, have often made mistakes in appointing army chiefs whom they thought they could count on.
Whoever emerges, analysts are agreed that regardless of loyalty to Musharraf, they should be loathe to involve the army in the country's politics given sentiment in the country.
''The next man will be thinking about the army's involvement in places that people don't like and soldiers don't like,'' said former ISI chief Durrani.
Musharraf's dual role has been a useful one-stop shop for Washington, as it needed Pakistan's political sign-off and military buy-in for a post-September 11, 2001, security agenda.
His support has been regarded as crucial to success of Western intervention in Afghanistan and the fight against al Qaeda.
The United States favours democratic transition, under which Musharraf shares the reins of power. Otherwise, risks of instability will grow in this volatile Muslim nation of 160 million people.
Whatever Musharraf's fate, he will leave behind a military high command glad to be getting US money and arms, and which recognises the threat militancy poses to Pakistan and its international standing.
''The senior generals all appreciate the importance of Pakistan's relationship with the United States,'' said Talat Masood, a retired general turned political analyst, adding that did not mean they were pro-American.
India, which has fought three wars with Pakistan since their partition 60 years ago, is closely watching the forthcoming musical chairs at army headquarters in Rawalpindi.
Speculation is swirling over who might be the next chief of army staff, with the vice chief spot and chairman of the joint chiefs of staff also falling open due to retirements in October.
Favourites for the chief or vice chief slots are Lieutenant-General Tariq Majeed, Tenth Corps Commander based in Rawalpindi, and ISI chief Lieutenant-General Ashfaq Pervez Kiani.
Both are close to Musharraf, and well-regarded by US counterparts, Western diplomats say.
''They've been in key positions from the beginning and stood with him throughout this time,'' a Western diplomat remarked.
The changes will come at a time when the army has suffered a series of blows to its prestige fighting militants in tribal areas such as Waziristan, a Western military official said.
Pakistan has lost over 1,000 troops fighting the Taliban and al Qaeda, and the conflict has meant ordering the army to fight its own people, while suicide attacks against soldiers and police have become common.
REUTERS SG DS1610