ISLAMABAD Pakistans President Pervez Musharraf has cancelled a scheduled visit to China, a member of his entourage said on Wednesday, as opponents in the coalition government consulted over his possible impeachment.

'We have been told that the presidents visit to China has been cancelled,' said the official, who had been due to fly with Musharraf on Wednesday to attend opening ceremonies for the Beijing Olympics and meet with the Chinese leadership.

Foreign Ministry spokesman Mohammad Sadiq confirmed the visit had been called off. The presidents spokesman was not immediately available for comment.

Pakistan treasures its close relationship with China as it provides a regional counterweight to old rival India, and for a Pakistani leader to call off a visit at such short notice is highly unusual.

Musharraf, a US ally who came to power as a general in a 1999 coup, has become overwhelmingly unpopular.

His allies were defeated in an election in February that resulted in a civilian coalition government led by the party of the late Benazir Bhutto, a two-time prime minister who was assassinated while campaigning last December.

Despite the loss of parliamentary support, Musharraf has resisted pressure to quit, and has insisted that he was willing to work with the new civilian government.

Musharraf has repeatedly said he will not use presidential powers to dismiss the parliament, but Pakistani political circles are rife with speculation that he is manouevring towards this scenario on grounds that the four-month-old civilian government has proved inept.

Asif Ali Zardari, the head of the ruling alliance, met his major coalition partner and former prime minister Nawaz Sharif in Islamabad on Tuesday to discuss issues that have bedevilled their alliance.

Sharif, the prime minister Musharraf overthrew, wants wheels set in motion to impeach the embattled president, but Zardari has until now warded off a confrontation with Musharraf, who neither the army or the United States wants to see humiliated.

Sharif said before the talks he was looking for a decisive meeting with Zardari to resolve their differences over the thorny issues of Musharrafs impeachment and restoration of Supreme Court judges who were dismissed by the president last November during a brief period of emergency rule.

Sharif withdrew his partys ministers from Prime Minister Yousaf Raza Gilanis cabinet in May, but did not go as far as pulling out of the coalition completely.

A spokesman for Zardaris Pakistan Peoples Party told reporters after Tuesdays meeting the two had reached a consensus on major issues and would meet again on Wednesday for further discussion.

The intense uncertainty has taken a toll on Pakistani markets, with the main Karachi Stock Exchange index hitting near 23-month lows earlier this week, while the rupee edged closer to all-time lows posted in early July.

The index dropped 3 percent at the open on Wednesday due to investors fears of an impending clash between the coalition and the president.

Investors have harboured doubts over whether the civilian coalition government has the ability to handle widening trade and fiscal deficits and inflation at a three-decade high.