THE embattled president of Pakistan, Pervez Musharraf, has been dealt his latest and most serious blow with the accusation from the leader of the ruling party that he misappropriated hundreds of millions of dollars of American aid given for supporting the war on terror.

Asif Ali Zardari, who took over the Pakistan People’s party (PPP) after his wife Benazir Bhutto was assassinated in December last year, made the charge in an interview with The Sunday Times.

He also detailed for the first time Musharraf’s attempts to sabotage his government which, he says, forced him to take the drastic step of demanding his impeachment.

“Our grand old Musharraf has not been passing on all the $1 billion [£520m] a year that the Americans have been giving for the armed forces,” he claimed. “The army has been getting $250m-$300m reimbursement for what they do, but where’s the rest?

“They claim it’s been going in budget support but that’s not the answer. We’re talking about $700m a year missing. The rest has been taken by ‘Mush’ for some scheme or other and we’ve got to find it.”

The alleged misappropriation will form a key part of the charge against Musharraf to be announced tomorrow when parliament is recalled to start impeachment proceedings.

The move has sparked panic in Whitehall and Washington where the nuclear-armed Pakistan is increasingly seen as a far greater danger than Iraq or Afghanistan.

In Pakistan, fear is mixed with widespread support among a public that cannot understand why Musharraf remains as president six months after elections in which his own party was dealt a humiliating defeat.

Accusing Musharraf of mis-using funds is a rare pleasure for the 54-year-old Zardari, whose own name became a byword for corruption during his wife’s first government in 1988-90. He spent 11 years in jail on charges for which he was never convicted.

Zardari claims the American aid may have gone to fund rogue members of the military intelligence, the ISI, who were last week accused by Washington of assisting Taliban and jihadi groups rather than rooting them out.

“We’re looking for the money,” he said. “I think he [Musharraf] has a slush fund being used for this and for some activity for the future.” Zardari also accused the president of economic sabotage and fomenting conflict in Baluchistan and the tribal areas. “They laid so many mines for us,” he said.

“They spent all the money so we would have to borrow; they didn’t pass on the increased price of oil; nor added a single extra megawatt of power in the last 10 years. All these things were deliberately thought out so at the end of day they can turn round and tell the world, ‘Look, democracy doesn’t deliver’, and step back in.”

Zardari was speaking from the house in Islamabad from where Bhutto set off for her last rally. Her assassination turned him from an ostracised figure, blamed by many for her double dismissal from office, to a grieving widower and the country’s most powerful politician.

The road outside is manned by police and his house is guarded by his own protection team of men in black. “I know I’m in danger,” he said. “Whoever killed her wants to kill me.” Inside, the living room is dominated by a life-size picture of Bhutto from that day, garlanded with rose petals and hands raised as she addresses the crowds in Rawalpindi.

Minutes later, as she popped up from the sunroof to wave, she was murdered.

“She’s all around me, I live with her,” Zardari said. “I haven’t touched one thing in her bedroom, her manuscript [of her last book] is lying on her side and I sleep on my side.”

Gesturing at her last photograph, he said: “I think she’s looking at us now and saying, ‘Now tell me, Asif, do you think it’s easy?’” On the wall of the dining room is a framed copy of her handwritten will naming him as her successor. It is dated October 16, just two days before she returned to Pakistan after 8½ years in exile.

It left Zardari as kingmaker but, although the PPP emerged as the largest party, its lack of a majority forced it into a coalition with Bhutto’s long-time rival Nawaz Sharif, leader of the Muslim League.

Sharif’s price for his support was the removal of Musharraf, who ousted him as prime minister in his 1999 coup. He also wanted restoration of the judges who were sacked when Musharraf declared a state of emergency last November.

Last Tuesday Sharif told Zardari that he would withdraw his support for the coalition unless the president was removed. The following night the impeachment plan was announced at a joint press conference. It follows criticism by the United States during the government’s trip to Washington 10 days ago for failing to rein in the intelligence services still supporting the Taliban.

“To say we’re responsible for the country, yes we are, but first get your role model out of the way, remove your most allied of allies,” said Zardari. “They’ve had Musharraf there 10 years, instead of bringing these issues up with him they are trying to bring them up with us today.”

In the meantime the impending impeachment battle has plunged Pakistan into further instability. Zardari said he had been left with no option after Musharraf refused to accept an honourable exit.

“The offer was on the table that you walk and you don’t get prosecuted, but I’ve had no returns so have had no choice but to go along with my partner’s more aggressive stance,” he said.

Musharraf has made it clear that he will fight any such effort. “I’m not afraid; I’ve not learnt fear,” he said in a speech. It is still unclear whether Zardari and Sharif can muster the two-thirds of both houses needed to unseat him. In the meantime, Musharraf still has the power to dissolve parliament.

Zardari warned against such a move, saying: “If he does it, it will be his last verdict against the people, the people’s mandate and against Pakistan.”

Blood honour

THE widower of Benazir Bhutto and their three children are preserving her bedroom in their Dubai home as a shrine and have pledged to give blood in her memory at every birthday and anniversary of her death.

“Our bedroom in Dubai has been locked and I sleep in the next room because the children and I don’t want to lose her scent in the room,” said Asif Ali Zardari.

Zardari wants to turn the house in Karachi he gave her as a wedding present into a museum in her memory. Bhutto left it in her will to their son Bilawal, so father and son are in negotiations.

Times Recommends

• Over the Wall
• Why Africa welcomes the ‘new colonialism’
• Which will come out on top: paper or gold?