President Musharraf of Pakistan and Benazir Bhutto finalised a powersharing deal yesterday, paving the way for the exiled former leader to return to her homeland.

A senior Pakistani official said that General Musharraf would formally announce a “national reconciliation” accord today, dropping corruption charges against Ms Bhutto and lifting a ban on her serving a third term as Prime Minister.

“They have agreed on the draft and it will be issued by the President tomorrow. Benazir Bhutto has given her assent,” the Railways Minister Sheikh Rashid, a close confidant of the President, said last night. Ms Bhutto had been in talks with General Musharraf for months but a formal agreement had until now been blocked by the latter’s political allies, who feared being marginalised.

Farooq Naik, a leader of her Pakistan Peoples’ Party, confirmed that Ms Bhutto had approved the draft of the ordinance prepared by the Government. “It is back with President Musharraf to sign it,” he said.

Bhutto was killed by bomb blast

The team from the Metropolitan Police’s Counter Terrorism Command have backed the claim that Benazir Bhutto was not shot

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• Pictures: death of Benazir Bhutto

• Pictures: Pakistan

Background

• Pakistan in turmoil as ‘martial law’ imposed

• Bhutto escapes as bombers kill 126

• Timeline: Pakistan's period of turmoil

• The man out to oust a President

• Internal crisis gives Pakistan reason for hope

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• Excluding Sharif strengthens Islamists

• The Deal

Earlier Ms Bhutto told reporters in London that if a deal was reached her party would not join the opposition boycott of Parliament.

Ms Bhutto, who was elected Prime Minister twice in the 1990s,, has pledged to return to Pakistan on October 18. She went into exile eight years ago to avoid arrest on corruption charges filed by Nawaz Sharif, her successor, who was himself later forced into exile.

Yesterday’s deal, actively supportedby Washington, backs a constitutional amendment allowing her to serve a third term as Prime Minister. It also guarantees her immunity from prosecution over corruption charges. “The agreement says that there will be an across-the-board indemnity for public office holders between 1988 and 1999,” a senior government official said.

However, some officials indicated that the amnesty would not apply to Mr Sharif, who was ousted in a bloodless coup by General Musharraf in 1999. Last month he was deported soon after flying back to Pakistan.

General Musharraf said in a television interview on Wednesday that he was seeking reconciliation with Ms Bhutto to help to fight terrorism and extremism. But the deal with his most formidable adversary has antagonised many of his supporters.

Chaudhry Shujaat Hussain, president of the ruling Pakistan Muslim League, described the amnesty offer as unacceptable, while some sections of the opposition were equally outraged.

“Only corrupt elements would cheer this deal, as they will get a new licence to loot the national exchequer,” Liaquat Baloch, a leader of a coalition of Islamist parties, said.

The agreement came as Parliament was due to re-elect General Musharraf at the weekend. Barring a last-minute legal challenge from the Supreme Court, he is almost certain to secure another five-year term. Opposition parties allied to Mr Sharif plan to boycott the vote.

General Musharraf has promised to quit as head of the army by November 15 if he is elected.

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