Pakistan President Gen Pervez Musharraf on Wednesday announced he would quit as army chief in December 2004 after the ruling party clinched a deal with hardline Islamists to endorse his presidency and constitutional amendments in parliament ahead of next week's SAARC Summit.

"I have decided that I will shed my uniform in December 2004," Musharraf said in a televised address to the nation shortly after the ruling party and the six-party alliance Muttahida Majlis-e-Amal (MMA) signed an agreement to resolve the constitutional crisis.

"It was a difficult decision for me personally. I have been saying that a president in uniform is undemocratic but it was important due to the peculiar circumstances in Pakistan. I have taken the decision in the interest of political harmony in the country," he said.

An hour before Gen Musharraf addressed the nation, his confidants signed a deal with MMA leader Maulana Fazlaur Rehman. Senator S M Jaffar from the ruling Pakistan Muslim League-Q (PML-Q) signed the agreement on behalf of the government.

After Musharraf announced the outcome, Information Minister Sheikh Rashid Ahmad told the official media in Islamabad that the president's announcement was important in view of the SAARC summit scheduled to be held in Islamabad in January in which Prime Minister Atal Bihari Vajpayee would take part. The ratification of his presidency and his constitutional amendments would strengthen Musharraf politically before the summit, Rashid said.

Musharraf said the agreement with MMA would be placed as a constitutional amendment bill in the National Assembly, Senate and the four provincial assemblies and would be passed by Parliament with a two-third majority before January 1, 2004.

Simultaneously, he would also seek a vote of confidence through a resolution expressing confidence in his presidency by parliament and the provincial assemblies.

A simple majority would be enough to get it ratified. The confidence vote should satisfy all who refused to acknowledge his election as president in a referendum in April 2002, Musharraf said.

MMA said it would not vote on his confidence resolution but would abstain to enable it to secure an easy majority. Parliament has been summoned for Friday for this purpose and the entire process is expected to be completed before the arrival of the heads of SAARC countries on January 3 to attend the summit, officials said.

Musharraf confined his speech only to the part concerning retirement from the army, the agreement reached with the MMA and did not refer to any other issues, including Indo-Pak ties. He said he always took decisions in the right time and believed that a decision on the issue of army chief should not be delayed.

Though his decision would have significant bearing on his political future in the long run, Musharraf is expected to retain his clout over the armed forces for the time being, as the MMA has agreed to permit the president to retain the powers to appoint chiefs of the armed forces in consultations with the prime minister.

Ahead of these developments, Musharraf has purged the army top brass of hardliners. Vice Chief of Army Gen Younis Khan, a hardliner, and Chief of Joint Chiefs of Joint Committee Gen Aziz Khan are scheduled to retire by October 2004, before Musharraf does.

Musharraf said agreement has been reached on all the contentious issue of his constitutional amendments called Legal Framework Order (LFO). The salient pointes include: he would have the right to dismiss government and dissolve parliament. But the dissolution of parliament would be subject to a review by the Supreme Court in 15 days.

The MMA has agreed to the constitution of the National Security Council (NSC) with the top brass of the military headed by Musharraf. It would be brought as an act of parliament.

Significantly, Musharraf has backed down from his earlier stand of three years extension for Supreme Court and high court judges. It was seen as attempt by the government to bribe judges to back its stand.

The president congratulated both the government and MMA teams for concluding the discussions on the LFO amicably and expected that "all political parties in future will conduct the proceedings of parliament democratically and harmoniously."