What next for Pervez Musharraf and Pakistan? | Key extracts of resignation speech | Where does Musharraf go now?

The sound of gunfire, cheering and drums echoed in celebration across Pakistan last night after Pervez Musharraf, a stalwart US ally in the War on Terror, resigned as President, nine years after he seized power.

The general, who stepped down as army chief last year, announced his resignation during a rambling and sometimes emotional one-hour address to the nation. On Sunday the ruling coalition, which trounced his allies in the February election, had drawn up impeachment charges and said that it would present them to parliament this week if he did not resign.

Envoys from Saudi Arabia, the US and Britain - Pakistan’s three biggest sponsors - also met Mr Musharraf in recent days.

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“After consultations with legal advisers and close political supporters and on their advice, I’m taking the decision of resigning,” Mr Musharraf, 65, said in his address. “I don’t want anything from anybody. I have no interests. I leave my future in the hands of the nation and people.”

It was a poignant moment for a man who had vowed to rescue Pakistan from economic ruin, and then threw his weight behind Washington after the September 11 attacks, pledging to root out Islamic extremists.

His departure deprives the West of its most important partner in the campaign against Taleban and al-Qaeda militants. Western intelligence officials said his resignation would lead to uncertainty at a crucial juncture. “Pakistan is al-Qaeda’s new frontline. They have been strategically defeated in Iraq, and Pakistan is now where the action is,” one expert told The Times.

One of the gravest concerns is that Pakistan’s Inter-Services Intelligence agency “might revert to what they did in the 1990s which was to support the jihad groups”, one expert said. Britain has had mixed success with the ISI in tracking Britons going to Pakistan for terrorist training, and monitoring Taleban commanders moving in and out of Afghanistan.

American officials are worried that the new Government might not adhere to Mr Musharraf’s unwritten agreement to allow them to attack al-Qaeda leaders in Pakistan from Afghanistan, using Predator drones.

David Miliband, the Foreign Secretary, praised the “significant dividends” of his time in office. Condoleezza Rice, the US Secretary of State, called him “a friend to the United States and one of the world’s most committed partners in the war against terrorism and extremism”.

Mr Musharraf’s resignation ends the political standoff that began last year when he tried to dismiss the Chief Justice, sparking nationwide protests by lawyers. It was met with relief and jubilation in most of Pakistan, where he is disliked for the very reasons he gained favour in the West.

Maulvi Mohammed Omar, a spokesman for the Pakistani Taleban, said that it was day of jubilation for Muslims all over the world. Former pupils of the radical Red Mosque, which was raided by the military last year, offered prayers outside the parliament.

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