Court issues arrest warrant for Pakistani PM nominee

ISLAMABAD (Reuters) - A court has issued an arrest warrant for the ruling party veteran poised to replace Pakistan's ousted prime minister, local television stations reported on Thursday, deepening political uncertainty in the strategic U.S. ally.

Pakistan's president had nominated Makhdoom Shahabuddin as the Pakistan People's Party (PPP) candidate in an apparent bid for continuity ahead of elections due early next year.

Shahabuddin, the textiles minister, filed his nomination papers on Thursday. The ruling coalition has a comfortable majority in parliament, which meets on Friday in an extraordinary session to elect a new prime minister.

In an unexpected twist to Pakistan's latest political saga, an anti-narcotics court issued an arrest warrant for Shahabuddin in connection with a case of violated quota limits for the export of ephedrine while he was health minister.

That case allegedly involved Gilani's son, Ali Musa Gilani, who is accused by anti-narcotics investigators of violating the quotas. Gilani and Shahabuddin have denied any wrongdoing.

Shahabuddin's nomination papers were approved by parliamentary authorities, but his bid for premiership could be undermined by the court orders.

He avoided questions from reporters about the court orders after filing his nomination papers, responding with only a line of poetry about adversity.

The PPP nominated two other candidates, former information minister Qamar Zaman Kaira and former water and power minister Raja Pervez Ashraf, as candidates for prime minister as well.

Leaders of the ruling coalition parties are meeting in Islamabad to further deliberate on their pick for prime minister after the warrant for Shahabuddin, adding to the drama in the build-up to Friday's vote in parliament.

The Supreme Court on Tuesday declared Prime Minister Yusuf Raza Gilani ineligible for office for refusing to re-open corruption cases against President Asif Ali Zardari, triggering a new crisis in nuclear-armed Pakistan.

At the time, a senior aide to Gilani said only parliament could dismiss the prime minister, raising the possibility of a confrontation between the judiciary and government, but by nominating a new man the president has accepted the ruling and backed away from a fight.

PUBLIC FRUSTRATION

The new prime minister will face mounting public frustrations over a staggering range of problems, and a Supreme Court chief justice who prides himself on standing up to Pakistan's most powerful players.

Gilani's removal is likely to further heat up the Pakistani political arena, where the civilian leadership, the powerful military and the Supreme Court square off against each other at the expense of a public longing for stability and a stronger economy.

Shahabuddin's warrants were sought by Pakistan's Anti-Narcotics Force, a government body run by the military, and headed by a senior serving army officer. Analysts say the timing of the move is suspicious.

"To have so much movement so quickly on this case in one day is unusual. You don't usually see such efficiency in Pakistan, and the (Anti-Narcotics Force) is controlled by the army," said political analyst Hasan Askari Rizvi.

"It appears to a message that the army is also watching the process closely."

Pakistan's relations with the United States, which provides it with billions of dollars in aid, are at their lowest point in years.

Taliban militants still pose a major security threat, despite numerous army crackdowns. The economy is struggling and analysts predict Pakistan will again have to turn to the International Monetary Fund to keep it afloat.

Chronic power cuts, which triggered violent protests this week, show no signs of easing.

Shahabuddin, who enjoys smooth ties with coalition partners, was seen as a safe bet for the ruling Pakistan People's Party, which is gearing up for a general election due early next year.

But the former deputy finance minister will likely face the same pressures as did Gilani from Supreme Court Chief Justice Iftikhar Chaudhry to reopen old corruption cases against Zardari.

Thousands of corruption cases were thrown out in 2007 by an amnesty law passed under former military president Pervez Musharraf, paving the way for a return to civilian rule.

Two years later, the Supreme Court ruled that agreement illegal, and ordered the re-opening of money laundering cases against Zardari that involved Swiss bank accounts.

Gilani and his government refused to obey the court's order to write to Swiss authorities asking them to look again at those cases, arguing that Zardari had immunity as the head of state.

The United States is hoping for stability in Pakistan so that Islamabad can engage Washington and work to improve ties damaged by a series of events, most recently a NATO cross-border raid in November which killed 24 Pakistani soldiers.

Pakistan closed supply routes to NATO forces in Afghanistan to protest against the attack, and negotiations on re-opening the lines are deadlocked.

(Editing by Daniel Magnowski)

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