Pakistan's government agreed today (March 16) to reinstate a chief justice to defuse a political crisis and end a street agitation threatening to turn into violent confrontation.

Iftikhar Chaudhry, former chief justice, became a cause celebre after being dismissed in late 2007 by then-president and army chief General Pervez Musharraf.

"I announce the restoration of all deposed judges including Chaudhry according to a promise made by the president of Pakistan and myself," Prime Minister Yousaf Raza Gilani said in a televised address to the nation.

Opposition leader Nawaz Sharif had thrown his support behind the anti-government lawyers' protest campaign that had threatened to bring turmoil to nuclear-armed Pakistan as the government struggles to stem militancy and revive a flagging economy.

After the prime minister's announcement, Sharif called off a "long march" protest making its way to the capital Islamabad.

The political crisis gripping the Muslim nation had alarmed the US and Britain, which fear any slide into chaos would help the Taliban and al Qaeda become stronger in Pakistan.
The US has welcomed Chaudhry's reinstatement.

"This is a statesmanlike decision taken to defuse a serious confrontation, and the apparent removal of this long-standing national issue is a substantial step towards national reconciliation," the US embassy said.

President Asif Ali Zardari, elected by parliament six months ago, had feared Chaudhry could wage a vendetta against Musharraf that could also threaten his own position.

Although he has a healthy majority in parliament, Zardari's retreat on the issue will raise questions about his future, and enhance the standing of his chief rival, former prime minister Sharif.

Chaudhry will be reinstated on March 21 when the incumbent retires.

Several hundred jubilant lawyers and activists gathered outside Chaudhry's Islamabad residence, which he refused to vacate after his dismissal when Musharraf declared emergency rule in a desperate move to extend his presidency for another term.

They danced and chanted "Long live the chief justice".

"It's victory for those who fought for independence of the judiciary and it's the first time in the history of Pakistan that a movement launched by the middle class has proved successful," said retired judge Tariq Mehmud, a lawyers' campaign leader.

International Concerns

Western diplomats had tried to make Zardari pull out of a collision that could destabilise the year-old civilian coalition and force a reluctant army chief, General Ashfaq Kayani, to intervene.

Sharif, a two-time prime minister with a conservative, religious nationalist support base, had backed a lawyers' movement fighting for the independence of the judiciary.

His government was overthrown by Musharraf in 1999, and since his return from exile in late 2007 he has become Pakistan's most popular politician, thanks partly to his stand over the judge.

Sharif was conciliatory, congratulating Zardari and Gilani.

"We have got the fruit of our two-year struggle," Sharif told supporters in Gujranwala town where the protest procession stopped on its way to Islamabad when news came through of the government's decision.

"Now the destiny of this country will change. This development will lead to a revolution in Pakistan," he said.

Zardari, widower of assassinated former prime minister Benazir Bhutto, was elected by parliament last September after forcing Musharraf to quit the presidency.

Deeply unpopular, Zardari was further damaged when he broke a promise to Sharif last year to reappoint Chaudhry, though he reappointed most other judges axed by Musharraf.

Zardari finally conceded over Chaudhry after Sharif and the lawyers held a day of protest in Lahore on Sunday, and set off for Islamabad for a planned sit-in outside parliament.

Au