Pakistan's coalition government is under pressure to settle its dispute over reinstating sacked judges after an aide to Nawaz Sharif, the leader of the PML-N party in the goverment, said it was prepared to pull out.

Pervez Rasheed, a close aide of the former prime minister, said the party's leaders would meet on Monday to decide whether to join the opposition amid growing differences with the Pakistan People's Party (PPP).

"General opinion in the party is in favour of parting ways," Rasheed told The Associated Press news agency on Sunday.

Sharif has demanded that the PPP agree to reinstate the 60 judges sacked by Pervez Musharraf, the former president who quit last week, by Monday in order to remain united for presidential elections to be held on September 6. 

But the PPP under Asif Ali Zardari - who confirmed on Saturday that he would bid to replace Musharraf - has been stalling on the issue.

Sharif demands

Fact file

Pakistan's political uncertainty has led to economic turmoil Inflation is at a record 24 per cent currently, fueled by high food prices and a rapidly weakening currency. The Pakistani rupee has fallen almost 24 per cent against the dollar this year. Foreign exchange reserves, a reflection of the strength of an economy, stands a little under $10 bn -- the lowest in six years. Economic growth has slipped to 5.8 per cent from a stable 7.2 per cent a year ago and is expected to slide even further. The stock market has plunged by 32 per cent in four months.

Sharif has been asked to support Zardari's nomination but has made this conditional on the return of the judges and the PPP leader agreeing to limit the powers of the presidency.

He says that Zardari has reneged on a written agreement to restore the judges within 24 hours of Musharraf's decision on August 18 to quit rather than face impeachment charges.

Siddiqul Farooq, a spokesman for the PML-N said that the issue of  whether Zardari would stand for the presidency was the PPP's "own decision," not that of the coalition partners, but reiterated his leader's demands.

"We do not want a civilian president with the same powers that Musharraf had, mainly the power to dissolve parliament," Farooq said.

"Our top priority is restoration of the judges and we want it done on Monday."

Analysts say the PPP is reluctant to restore the judges because of concerns the deposed chief justice might take up challenges to an amnesty from corruption charges last year granted to Zardari and other party leaders.

Presidential contest

In a sign that relations between the two sides were becoming increasing fractured, another of Shraif's aides on Saturday offered to stand for the presidency in opposition of Zardari.

"I am also willing to contest the presidential election, but I am bound to obey what the party decides,'' Javed Hashmi, one of Sharif's most senior aides, said.

Kanwar Dilshad, the election commission secretary, said nomination papers for the presidency can be filed from August 26, with the final date for any withdrawals on August 30.

Under Pakistan's constitution, a president is elected by members of the country's four provincial assemblies and the national parliament within 30 days of the post becoming vacant.

The political deadlock is making it increasing difficult for the government to tackle economic problems in the country, unrest in the tribal areas and the growing strength of armed pro-Taliban groups.

The security situation in Pakistan has prompted the International Cricket Council (ICC) to postpone the champions trophy tournament due to take place next month, until an undisclosed time in 2009.

The move comes after South Africa pulled out of the tournament on Friday. Several other countries were alos said to be considering withdrawing.