Bhutto casts shadow over Musharraf's re-election

ISLAMABAD, Oct 3 (Reuters) Pakistani President Pervez Musharraf's hope of a smooth re-election was threatened today as ex-prime minister Benazir Bhutto said her party would probably quit parliament to rob the vote of credibility.

''I think that the resignation of the Pakistan Peoples Party MPs will be a severe blow to the legitimacy of the presidential elections,'' Bhutto said in London, where her party began a two-day meeting to decide its plan of action.

There is still no certainty that Saturday's vote will go ahead, as the Supreme Court is considering a last-ditch bid by opponents to block Musharraf's re-election on grounds that as a serving soldier he shouldn't be allowed to stand.

The fate of US ally Musharraf, and future of nuclear-armed Pakistan is being closely watched, especially by Western nations with troops in Afghanistan and threatened by al Qaeda militants hiding in tribal lands on the border between the two countries.

If the election goes ahead in parliament and the four provincial assemblies on Oct. 6, Musharraf, who came to power in a coup in 1999, should easily beat his two rivals thanks to the ruling coalition's parliamentary majority.

It will be a hollow victory, however, if Bhutto's party joins other opposition by resigning from parliament.

Musharraf has been in negotiations with Bhutto for a possible post-election power sharing pact, but those talks had stalled, Bhutto told reporters in London.

The two-time former premier, who plans to return to Pakistan on October 18 after more than eight years of self exile, said her party's lawmakers would ''most probably'' resign, due to Musharraf's refusal to ''give a level playing-field''.

''We don't want to take this step, but certainly we are being pushed into taking this step by the inability of the present regime to move towards the democratisation of Pakistan,'' she added.

SEARCHING FOR FRIENDS The parliament that emerges from a general election due by mid-January is expected to be less friendly to Musharraf, as many of his political allies stand to lose their seats.

Support for Musharraf crumbled after he tried and failed to sack the country's top judge in March.

There was already widespread grumbling over rising prices, and discontent over an alliance with the United States that has brought the army into conflict with its own people.

The United States, keen to see Pakistan maintain efforts to root out al Qaeda and curb Taliban raids into Afghanistan, has been quietly encouraging Musharraf and Bhutto to work together.

Musharraf has promised to quit the army if he is re-elected and on Tuesday he nominated former intelligence chief Ashfaq Parvez Kayani as the next army commander in the clearest sign yet he would keep his vow and hang up his uniform.

The government also moved to address another of Bhutto's main demands, saying it had decided to drop corruption charges against her and other civilian leaders. But Bhutto said the announcement was ''disinformation''.

''ANOMALOUS AND ABSURD'' Having dismissed objections to Musharraf's re-election last week, the Supreme Court is now hearing new legal challenges to him standing while still army chief, and seeking a fresh mandate from the same assemblies that endorsed him five years ago.

The Supreme Court began hearing the case on Wednesday and ordered Musharraf's lawyers to explain why they thought he should be elected by out-going assemblies.

Opposition lawyer Hamid Ali Khan said it was ''anomalous and absurd'' for out-going assemblies to elect a president for a new term, ''This cycle will be going on and on permanently.'' An opposition alliance led by the party of another exiled former prime minister, Nawaz Sharif, has led the boycott of the presidential election in protest against Musharraf.

Pakistan's main stock index ended nearly 1 per cent higher on Wednesday. It has put on more than 5 per cent this week, largely on hope that Musharraf, who has overseen strong growth and booming stocks, will win re-election.

REUTERS RS MIR KP2223