Allies of Pakistan's President Pervez Musharraf have raised objections to a power-sharing deal he is negotiating with former prime minister Benazir Bhutto, casting fresh doubt on the future of the embattled president.

With his term coming to an end and his popularity plummeting, army chief Musharraf is trying to shore up his position as he prepares to seek election for another term by the national and provincial assemblies.

He has turned to Bhutto for help -- her popular Pakistan People's Party would broaden his base of support -- and has been negotiating a pact that is expected to see him quit as army chief and Bhutto become prime minister.

But many members of Musharraf's ruling Pakistan Muslim League (PML) are alarmed at the prospect of their old rival Bhutto returning from eight years of exile to take power from them.

PML president Chaudhry Shujaat Hussain said he had conveyed his reservations about parts of the proposed deal to Musharraf.

"We told him that there are certain things which are harmful for the country and the nation and they should be asked to review them," Hussain said, referring to Bhutto and her party and some of the demands they have been making.

Bhutto, who has been prime minister twice, wants the lifting of a ban on a person serving a third term. She also wants the president stripped of the power to dismiss governments.

But Hussain said his party opposed those demands.

Bhutto has insisted an agreement would hinge on Musharraf stepping down as chief of the army.

Both Bhutto and a government minister said this week Musharraf's uniform was no longer an obstacle, raising prospects that Musharraf might quit the army before his re-election.

Bhutto, who has corruption charges hanging over her, also wants immunity for officials who served in the late 1980s and 1990s.

She is due to consult her party colleagues in London to decide on their stand.

 But while agreement on Musharraf stepping down from the army appeared to have been reached, opposition from within Musharraf's party to other aspects of the deal was clouding its prospects.

A PML member of parliament said some in the party were trying to derail the deal. "Most of our members are worried about a deal with BB (Bhutto). They think she will steal the show," said the politician who declined to be identified.

"There are certain lobbies in the party who are trying to block it to ensure their political survival."

A spokesman for Bhutto's party said it could end the negotiations if its proposals were not accepted.

"We can walk out. We have several other options," said spokesman Farhatullah Babar.

Another looming problem for Musharraf, and Bhutto, is the return of exiled former prime minister Nawaz Sharif, the leader Musharraf overthrew in a 1999 coup.

Sharif has said he would return on September 10 to challenge Musharraf just before the president is expected to launch his re-election bid. A general election is due later.

Sharif's defiance of Musharraf has raised his standing among the public, some of whom have questioned Bhutto's motives for negotiating with the unpopular president.

"If Mr Sharif does return he will precipitate another crisis in the country which will pit the courts and the PML-N against the government," the Friday Times newspaper said, referring to Sharif's party. "Deal or no deal, the political crisis is bound to deepen in the short term."

Musharraf has ruled out declaring an emergency but fear of drastic action lingers. Pakistan's main stock index closed 1.26 per cent down with investors wondering what the politicians would do next, a dealer said.
 
Western governments are closely following the turbulence in the nuclear-armed state whose support is critical to fighting Al Qaeda and defeating the Taliban in Afghanistan. Reuters