Pakistan's Supreme Court reinstated Chief Justice Iftikhar Chaudhry in an historic ruling on Friday that dealt a blow to President Pervez Musharraf, who suspended the country's top judge four months earlier.

Chaudhry became a symbol of resistance to General Musharraf after refusing to quit in the face of pressure from the president and his intelligence chiefs, and was lionised by supporters in rallies round the country.

"The reference has been set aside and the chief justice has been reinstated," Justice Khalil-ur-Rehman Ramday, the head of the 13-member bench, said at the end of the two-month-old case.

The decision to reinstate Chaudhry was unanimous, but the decision to quash the charges, known as a reference, against him was carried by a 10-3 majority.

Chaudhry's defiance created the greatest challenge to Musharraf since he came to power in a coup eight years ago, and his reinstatement could create problems for Musharraf's plans for re-election for a second five-year term in the coming months.

The setback for Musharraf also comes at a time of heightened violence after a deadly army operation to crush a militant stronghold at Islamabad's Red Mosque earlier this month.

More than 180 people have been killed in a series of suicide attacks and shootings by Islamist militants, and on Tuesday a suicide bomber killed 17 people outside an Islamabad courthouse where Chaudhry had been due to speak to supporters.

Pakistan has been ruled by generals for more than half the 60 years since its formation after the partition of India in 1947, and it is the first time that the judiciary has given a ruling against a military ruler.

Lawyers in court stood and clapped as the decision was read, while shouts of "Go, Musharraf, Go" resounded among the throng of supporters for the chief justice gathered outside.

In the eastern city of Lahore, around 1,000 lawyers knelt in thanks in front of the High Court, and distributed sweets.

Musharraf's move against the judge sparked a nationwide lawyers' movement to defend the judiciary's independence and handed opposition parties a hot issue in an election year.

The country's top court has been regarded as too compliant ever since a ruling in the late 1950's which coined the phrase "doctrine of necessity" to justify the first military takeover.

Munir A Malik, president of the Supreme Court Bar Association and a member of Chaudhry's legal team, described it as an "historic decision" and proved that the "judiciary is independent in Pakistan".

On a number of occasions pro-Chaudhry protests have turned violent this year. At an attempt to address a rally of lawyers in Karachi in May about 40 people were killed when pro-government activists clashed with opposition supporters hoping to welcome Chaudhry to the city.

Former prime minister Benazir Bhutto, who hopes to return from self-exiled for elections and has held talks with Musharraf's emissaries over a possible deal, said the ruling could calm down Pakistan's political scene.

"I welcome the development of this restoration of the chief justice ... this will help defuse some of the frustrations but not all of the frustrations," she told journalists in London.

The mish-mash of misconduct charges against Chaudhry included using influence to get his son a job, fiddling petrol expenses and that he had a penchant for expensive cars.

The government filed a statement in the court last month in which it also accused Chaudhry of harassing judges, showing bias in appointments and intimidating police and civil servants.

Musharraf's real motive for trying to get rid of Chaudhry, many critics suspect, was that the judge could allow constitutional challenges to his plans to get re-elected by current assemblies before they are dissolved for a general election at the end of the year. - Reuters