One of Pakistan's biggest political parties is to leave its fragile civilian government only three months after the coalition was formed.

Nawaz Sharif announced that he was pulling his PML-N party out, after failing to agree terms with his coalition partners over how to reinstate judges who were axed by the country's military ruler, President Musharraf.

Mr Sharif added however that, despite resigning, he would not oppose the civilian government, ensuring its short-term survival. Despite being defeated in last February's election, Mr Musharraf remains Pakistani President.

"Our ministers will meet the prime minister tomorrow and give in their resignations," Mr Sharif told a press conference in Islamabad after a meeting of his party’s central executive committee and MPs.

He added that he was "very pained" at the decision, and added his party "will not sit on opposition benches for the time being."

Despite the resignation, both parties still appear reluctant to sever ties all together. They have called for the reinstatement of dozens of judges axed by Mr Musharraf, but disagree over how to do it.

Mr Musharraf sacked the judges and called a state of emergency last November, leading to international condemnation.

Scores of opposition supporters were temporarily imprisoned by police during a chaotic period which also saw Benazir Bhutto, then-leader of the PPP opposition party, assassinated by suspected Islamist militants last December.

Mr Sharif has been in coalition with the late Ms Bhutto's husband Asif Ali Zardari since their parties emerged victorious against pro-Musharraf parties in last February's democratic elections.

Today however Mr Sharif threatened to plunge the country back into further constitutional crisis with his announcement that his party was pulling out after the failure of weekend talks with his counterpart.

Zahid Hussain, The Times' correspondent in Islamabad, commented that Mr Sharif's claim that he would not oppose the PPP was unrealistic, as there were numerous differences between the parties which continued to simmer beneath the surface.

"A key difference is over the future of President Musharraf. The PPP does not want to remove him, unlike Mr Sharif's party," Mr Hussain said.

"The PPP says it does not have the numbers to remove the president - it requires a two thirds majority to impeach him - and is also under heavy pressure not to push the issue by the United States, which needs Musharraf for his cooperation in fighting terrorism.

"Zardari is also thought to be reluctant to restore the judges in case they decide to reopen a corruption case against him. Musharraf had given him an amnesty under a national reconciliation agreement."

General Talat Masood, a prominent analyst, agreed, saying that the impasse between the two parties made the political horizon very uncertain. "It is a setback for democracy. It is a setback for stability."

Mr Zardari has said that he wants to link the judges’ reinstatement to broader judicial reforms, that could restrict the chief justice’s tenure.

Complex legal and political issues, including the status of the new judges that Mr Musharraf installed after the purge, have also proved stumbling blocks to a deal.

"We will not rest until the judges are restored and Musharraf is ousted," Mr Sharif said, adding his party did not accept judges who had taken the oath during the declaration of emergency in November.

As Mr Sharif announced his decision, the Commonwealth announced that it was reinstating Pakistan's membership after suspending the country over Mr Musharraf's state of emergency during the heads of government conference in Kampala last November.

In a statement, the Commonwealth Ministerial Action Group (CMAG) said the suspension would be lifted immediately. "It (CMAG) decided that Pakistan is now restored to the councils of the Commonwealth," it said. While it was suspended, Pakistan could not take part in Commonwealth meetings and Commonwealth aid and cooperation projects in the country were halted.

President Musharraf seized power in a military coup in 1999, ousting Mr Sharif as leader. The current fragile coalition government is the first civilian administration seen in Pakistan since then. Mr Musharraf gave up his role as chief of staff of the Pakistani military after heavy international pressure last year.

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