By Zeeshan Haider
ISLAMABAD (Reuters) - Pakistani Prime Minister Yousaf RazaGilani called for a last-ditch effort to save his government onTuesday, after refusing to accept the resignations of cabinetministers from a coalition partner.
Nawaz Sharif, who heads the second-biggest party in thecoalition, announced on Monday his members were quitting thecabinet after failing to reach agreement to reinstate judgesdismissed late last year by President Pervez Musharraf.
A four-party coalition led by the Pakistan People's Party(PPP) of former prime minister Benazir Bhutto was formed afteran election in February that resulted in defeat for former armychief Musharraf's allies.
The alliance between the PPP and Sharif's party raisedhopes for a stable civilian government in a country ruled bygenerals for more than half its history since its independencein 1947.
Nine ministers from Sharif's party, including FinanceMinister Ishaq Dar, handed in their resignations on Tuesday butPrime Minister Gilani declined to accept them.
"Let's make a last-minute effort, so that this issue issomehow resolved," Gilani told Sharif's aides in commentstelecast by state-run Pakistan Television.
Gilani wanted to wait for Asif Ali Zardari, the widower ofBenazir Bhutto, who now leads the PPP, and was due to return toPakistan from Britain late on Tuesday.
Zardari says he is committed to restoring the judges butwants to link it to constitutional changes whereas as Sharifwants the judges reinstated without conditions.
Sharif's promise that his party, the Pakistan Muslim League(Nawaz), or PML-N, would still support the government while nolonger being part of it, provided little solace for a nationtired of turmoil.
"I voted in the hope that something good will happen but Idon't see that," said Nighat Anis, a teacher at a school on theoutskirts of the capital, Islamabad. "I'm very upset, reallyvery upset. Sometimes I think I should leave the country."
Western allies in the campaign against terrorism dread moreinstability in nuclear-armed Pakistan after the turbulence thatbegan in March last year when Musharraf tried to dismiss thecountry's top judge, touching off protests.
HOPES DASHED
As part of his efforts to secure another term as president,Musharraf fired about 60 judges seen as hostile to him inNovember, after he imposed a brief state of emergency.
If they are restored, the judges could help Sharif, theprime minister Musharraf ousted when he seized power in 1999,drive his usurper from power.
Critics say the fight to control surging inflation, andcounter Islamist militancy has suffered as a result of thecoalition's preoccupation with the fate of the judges.
The rupee has fallen 10 percent this year as the brewingpolitical crisis has undermined a currency under pressure froma surging oil import bill and fiscal deficit.
The rupee closed at 67.80/68.50 to the dollar on Tuesday,off Friday's all-time closing low of 69.40/50, thanks in partto stiff warnings against speculation by the central bank.
The stock market closed 1.79 percent stronger, still 7.7percent off its life-high on April 21.
A law student in Karachi, Zain Korai, said the wholecountry was depressed by the prospect of the PPP and PML-Nbecoming adversaries again.
"For the first time in our history we felt that change forthe better was happening in politics. But I'm sorry to say,nothing has changed."
The split in the coalition, analysts say, would be welcomedby U.S. ally Musharraf, and reinforce a perception that Zardariwas in league with the unpopular president.
Like Musharraf, Zardari is reluctant to see the return ofsome of the purged judges, particularly former chief justiceIftikhar Chaudhry, who accepted legal challenges to an amnestyMusharraf granted Zardari, Bhutto and others against graftcases.
(Additional reporting by Aftab Borka; writing by RobertBirsel and Simon Cameron-Moore; Editing by David Fogarty)
(For a Reuters blog about Pakistan please seehttp://blogs.reuters.com/pakistan)
