Pakistan's Government has cleared the way for Benazir Bhutto, the former Prime Minister, and her husband, to reclaim hundreds of millions of pounds frozen in Swiss bank accounts, according to senior anticorruption officials.

They say the prospect has been raised by a deal between Ms Bhutto and Pakistan’s military leader, President Musharraf, that will allow her to return home from exile this week.

Under the agreement, Ms Bhutto did not oppose General Musharraf’s controversial re-election as President earlier this month. In return, General Musharraf announced an amnesty for all politicians, including Bhutto and her husband Asif Ali Zardari, and all officials accused of corruption between 1986 and 1999.

Ms Bhutto and Mr Zardari were alleged to have amassed a fortune from kickbacks on government contracts during her two terms as Prime Minister. Their assets allegedly included a ten-bedroom, mock-Tudor Surrey mansion and, according to anticorruption investigators, £740 million in Swiss bank accounts.

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

Multimedia

• 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

Hassan Waseem Afzal, a high-flying civil servant who led the Bhutto investigation for ten years, said last week that he believed the deal with General Musharraf to drop the corruption charges would unlock the frozen accounts.

The accounts were registered in the names of Bhutto’s mother, Begum Nusrat Bhutto, and Mr Zardari, a former minister. But Mr Afzal said the Pakistan Government and a Swiss magistrate had obtained evidence that Ms Bhutto herself was a beneficiary.

Last week Ms Bhutto’s chief spokesman said she denied that any of the frozen accounts were hers, and insisted that all cases against her should be dropped. “These were not accounts belonging to Benazir Bhutto,” he said.

Her Pakistan People’s party (PPP) has spent millions preparing a “heroine’s welcome” for her return on Thursday.

She is widely expected to become Prime Minister again after parliamentary elections in January if she can reverse a constitutional ban on serving more than two terms.

Since General Musharraf announced his amnesty, lawyers for Ms Bhutto and other politicians have been filing for cases in Pakistani and international courts to be dismissed. The PPP has written to an investigating magistrate in Switzerland, where Ms Bhutto and her husband are being prosecuted for alleged money laundering, to inform him that the Pakistan Government has dropped all cases against them.

Ms Bhutto and Mr Zardari, who spent seven years in prison in Pakistan on corruption charges, were convicted in absentia by a Swiss court in 2003. The Swiss magistrate found that during her second term as Prime Minister she enriched herself or her husband with kickbacks from a government contract with two Swiss companies.

Her lawyer denied the charges and successfully appealed to have the case tried by a higher court.

Mr Afzal, who was deputy head of Pakistan’s anticorruption National Accountability Bureau (NAB) and led its Bhutto inquiry, confirmed last week that he had been ordered to drop the case earlier this year.

Ms Bhutto has always denied that she has any overseas assets and her lawyers said whether any accounts had been “unfrozen” was of no interest to her.

Ms Bhutto has also denied that she or her husband owned Rockwood, the £4 million Surrey mansion.

Pressure for a deal between Ms Bhutto and General Musharraf came mainly from Britain and the United States. They believe her political skills could help the President in his war against Taleban militants along the Afghan border.

“Cash is important to Benazir,” a Western diplomat said. “But it’s political canniness that she brings to the table. That’s why we need her back.”

Times Recommends

• Rio Tinto four held as China prepares case
• Diplomats must keep heads down and trousers up
• When in Rome should one make like Berlusconi?