Musharraf said ready to quit, talks on

By Zeeshan Haider

ISLAMABAD (Reuters) - Pakistan's President Pervez Musharraf is ready to resign rather than face impeachment but is seeking immunity from prosecution and agreement on a safe place to live, coalition government officials said on Friday.

Speculation has been mounting that the former army chief Musharraf and firm U.S. ally would quit since the ruling coalition, led by the party of assassinated former prime minister Benazir Bhutto, said last week it planned to impeach him.

A spokesman for the president has repeatedly denied media reports that he was about to quit, and he did so again on Friday, saying "baseless and malicious" reports about the president's plan to resign were damaging the economy.

A prominent ally of Musharraf's, the leader of the main party that has backs him, also said the president would not resign but would face any impeachment charges in parliament.

But coalition officials said negotiations on the terms of the unpopular president's resignation were going on, although the two main coalition parties differed on whether Musharraf should face trial if he quits.

"He is ready to resign but he is putting conditions like indemnity for the November 3 action," said the official, who declined to be identified, referring to Musharraf's imposition of six weeks of emergency rule last year.

"Back-door talks are still going on. Things have not yet been finalised. Let's see what happens," said the official, who has knowledge of the talks.

The long-running crisis surrounding Musharraf's future has heightened concern in the United States and among other allies about the stability of the nuclear-armed Muslim state, which is in the front line of the campaign against Islamist militancy.