Pakistan denies Musharraf resignation rumour

The Pakistani army and President Pervez Musharraf's spokesman moved to dampen speculation on Thursday that the beleaguered president was about to quit.

Rumours that U.S. ally Musharraf was close to resigning were one of the reasons for falls of more than 4 percent on the Karachi stock market on both Wednesday and Thursday.

Ever since a February general election robbed him of parliamentary support, speculation has abounded that the unpopular president, who came to power as a general in a 1999 coup, would be driven from office.

A front page story in the News newspaper on Thursday focused on a late-night meeting between the army chief, General Ashfaq Kayani, and Musharraf.

The military issued a statement saying Kayani "regretted that a section of press is trying to unnecessarily sensationalise routine functional matters".

A spokesman for Musharraf rebutted the newspaper article's assertion that Musharraf had agreed to leave his official residence in Rawalpindi.

"Neither has there been any discussion of the president moving out of the President's Lodge, nor is there any plan for him to do so," said Rashid Qureshi.

Formerly known as Army House, the Rawalpindi residence was renamed the President's Lodge after Musharraf quit as army chief last November and opted to continue living there for security reasons.

Another close aide to Musharraf said any suggestion that the army had asked him to step down was "totally wrong".

Despite pressure from several sides to quit, Musharraf has sat tight and watched cracks develop in the new coalition over how to tackle him.

The Pakistan People's Party (PPP), leading the two-month-old government, has drafted a 62-point constitutional amendment that will reduce the president to a figurehead.

The constitutional package will take many months to debate, but it could persuade Musharraf to leave gracefully in the meantime, according to a senior PPP official.

Coalition partner Nawaz Sharif, the prime minister Musharraf overthrew, is impatient to see his usurper hounded out of office.

Sharif aims to contest a by-election next month for a seat in the National Assembly, having been barred from contesting the February election.

At a meeting of his party in Lahore to mark the 10th anniversary of Pakistan's nuclear tests on Wednesday, Sharif said Musharraf should be tried as a "traitor".

Political analysts say that while the army has taken a more constitutional role since the election, its top brass would be unlikely to stomach the humiliation of a former chief.

The army has ruled Pakistan for more than half the country's history since it was carved out of British-ruled India in 1947.