The process for appointing a new director general of the Military Lands and Cantonments Department could trigger a fresh confrontation, The News daily reported on Saturday.
The incumbent, a serving Major General, is set to retire on February 20 and the army apparently wants to retain control of the multi-billion rupee enterprise.
The Defence Ministry has moved a summary or formal proposal to the prime minister for appointing another serving officer, Major General Tahir Masood, but the Premier's office appears to be in "no mood to accommodate the request," the report said.
The prime minister's secretariat has "declared in categorical terms that no summary for appointment of a serving army general to a civilian position will be entertained," it said.
Civilian officials said the post is a "purely civilian" one.
These developments come days after the partial easing of civil-military tensions over a secret memo that sought US help to stave off a feared coup in Pakistan in May last year following the killing of al-Qaeda chief Osama bin Laden in a covert American raid in Abottabad.
The director general of Military Lands and Cantonments is the head of 43 cantonment boards and military estate offices dealing with 5.5 million civilians.
Since the formation of the Military Lands and Cantonments Group, the post of its chief had been filled by a civilian bureaucrat but former military ruler Pervez Musharraf grabbed it in 1999 and appointed a major general in violation of rules.
In 2008, army chief Gen Ashfaq Parvez Kayani recalled all serving army officers from civilian posts but the general posted as director general of Military Lands and Cantonments was not recalled.
Currently, Maj Gen Athar Hussain Shah is serving as the director general and he will retire on February 20.
The Premier's spokesperson, Akram Shaheedi, said the prime minister's secretariat had not received any summary for appointing a major general as the new director general.
Shaheedi said the premier would "never approve any summary of posting any serving military person against a civilian post in violation of rules."
The Pakistan Military Lands and Cantonments Officers Association has passed a resolution saying that no institution has a valid legal and moral claim over the post of the director general except the department itself.
The resolution spoke about negotiating with the senior-most echelons of the Pakistan army and intimating them of the legitimate claim of officers of the department to the post.
Pakistan's cantonment boards are overwhelmingly administered by military authorities as the president of the board is always a serving army officer, usually a brigadier.
The military estate officer manages lands in cantonment areas and 99% of the clientele of cantonment boards and military estate officers are civilians.