Pakistan is facing a fresh political crisis after the ruling coalition agreed to begin impeachment proceedings against President Pervez Musharraf.
President Musharraf has said he would fight impeachment
The deal came after three days of talks between Asif Ali Zardari, the widower of slain former prime minister Benazir Bhutto, and Nawaz Sharif, a former prime minister.
A sitting Pakistani president has never been impeached before.
Mr Zardari said: "The coalition further decided that it will immediately initiate impeachment proceedings.
“The coalition leadership will present a charge sheet against Gen. Musharraf.”
Sky’s Asia correspondent Alex Crawford said: “For Pakistan, this is very bad news - there will be more turmoil and the stock markets have already taken a hit over this.”
She said the US would also be concerned about Pakistan’s future ability to fight terrorism.
Mr Musharraf has cancelled a trip to Beijing for the opening of the Olympic Games and his place will be taken by Prime Minister Yousuf Raza Gilani, the foreign ministry said.
The president’s allies lost elections in February but he has refused to quit.
A source told the AFP news agency: “The president’s options are either to issue an order dissolving the national assembly or impose emergency rule, under which the government will be suspended and a new caretaker set-up would be announced.”
Mr Musharraf, a former commando, seized power in a military coup in October 1999 and ruled Pakistan for eight years.
He was backed by the United States, which has counted him as a key ally since 9/11.
But his popularity slumped after he ousted the country’s chief justice and imposed a state of emergency in November 2007 to prevent any challenges to his re-election
Mr Ali Zardari’s Pakistan People’s Party (PPP) formed an alliance with Mr Sharif’s PML-N after defeating Mr Musharraf’s political allies in February.
The coalition has also agreed to restore judges sacked by Mr Musharraf.
Mr Musharraf has previously said he would fight impeachment and would not resign.