Pakistan President Pervez Musharraf [Images] and former prime minister Benazir Bhutto [Images] are close to finalising a power-sharing deal, reports said on Thursday. While General Musharraf will have to retire from the Army in accordance with the deal, graft charges against Bhutto, her husband and other legislators will also have to be dropped.

Bhutto told UK daily The Guardian that an agreement between her and the Pakistan president was "80 to 90 per cent complete," after negotiations in London [Images] with Musharraf's advisers.

Musharraf has accepted her key demand that he give up his uniform before the impending elections, said Bhutto. "A lot of progress has been made, particularly on the uniform. But it's for the president to make an announcement," she added.

General Musharraf has also agreed to drop corruption charges against Bhutto, her husband and dozens of other legislators, in the form of a general amnesty, she said.

The news of a deal between Musharraf and Bhutto has led to speculations that Pakistan might return to civilian rule after eight years of military governance under Musharraf.

Incidentally, the president had claimed only a few months ago that his uniform was a 'second skin' that cannot be removed. But one of his closest political lieutenants confirmed the deal on Thursday

"It has been settled and the president will make an announcement," said Pakistan Railways Minister Sheikh Rashid Ahmed in Islamabad. According to Ahmed, an understanding between Bhutto's Pakistan People's Party and General Musharraf will be finalised this week. Under the deal, Bhutto will return from exile to become prime minister while General Musharraf will become 'Mr Musharraf' - a civilian president with responsibility for counter terrorism and security affairs.