The ex-commando, who seized power in a coup nine years ago, has yet to make any public response after being given the option of facing a confidence vote in parliament or being impeached.
A session of the National Assembly, Pakistans lower house of parliament, has been called for Monday, coincidentally Musharrafs 65th birthday, to start what could be a lengthy process unless the president decides to bow out without a fight.
The prospects of the nuclear-armed Muslim country that is also a hiding place for al-Qaeda leaders lurching into a fresh bout of instability will be viewed with trepidation by the United States and other Western nations, and regional neighbours.
A meeting of the armys top brass reconvened on Friday at the headquarters in
A military spokesman said the meeting, which began on Thursday, was a regular gathering of corps commanders chaired by General Ashfaq Kayani, who Musharraf passed the baton of command to last November.
Although Kayani had been Musharrafs intelligence chief, civilian politicians have been encouraged by his efforts to withdraw the army from political affairs.
Speaking to news channels on Friday, a leading member of the coalition, Chaudhry Nisar Ali Khan expressed optimism that Kayani would not let the army 'meddle in politics'.
While the army had accepted a switch to civilian rule which began with the defeat of pro-Musharraf parties in an election on Feb. 18, it was supposed to be a transition, and the generals could react badly to any humiliation of their former chief.
Despite the uncertainty, investors in a share market that has lost 38 percent since peaking on April 21, recovered some nerve on Friday as the main index rose 2 percent. The rupee at 72.60/70 to the dollar was a whisper away from all-time lows struck a month ago.
Politicians and analysts believe the generals will want to watch how the situation unfolds.
'They will, of course, look at it with concern but it depends upon whether its going to be smooth or its going to be turned into a mess,' said Ayaz Amir, an anti-Musharraf politician in the National Assembly, and a former army major.
'They will have their concerns, but having concerns is one thing and sending in the tanks is quite another.'
The civilians, this time, took over an economy facing possible meltdown, with people suffering spiralling food and fuel prices, and Islamist militancy spreading across the northwest.
Musharraf was blamed for
Sharifs party said on Friday some ministers would rejoin the cabinet, having pulled out last May after Zardari backtracked on a commitment to reinstate Supreme Court judges Musharraf had dismissed during emergency rule late last year.
It said the rest would rejoin once the judges are restored.
Musharraf has said in the past he would resign rather than be dragged through an impeachment process by a parliament filled with enemies.
He has also said he will not use powers to dissolve parliament, but critics say the unpredictable president suffers from a 'saviour complex', and he could do just that in order to remove rivals he believes are making a mess of running
To do it he will need the armys backing, something which analysts have described as a 'worst-case scenario'.
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