Islamabad: Pakistan's Supreme Court resumed hearing on Thursday a last-ditch bid to block President Pervez Musharraf's expected re-election as former leader Benazir Bhutto prepared to say in London if her party would boycott the vote.

The Supreme Court could order a postponement of Saturday's vote by members of two houses of parliament and four provincial assemblies if it rules in favour of petitioners who argue that Musharraf, as army chief, should not be allowed to stand.

If the vote goes ahead, Musharraf looks set to win.

The fate of Musharraf, a staunch US ally, and nuclear-armed Pakistan is being closely watched, especially by Western nations who have troops in Afghanistan and feel threatened by Al Qaida militants hiding on the Pakistani-Afghan border.

If Bhutto, leader of the largest opposition party, decides to join an opposition alliance headed by former prime minister Nawaz Sharif's party in a boycott, the vote will lack credibility.

Bhutto has been in talks with Musharraf on a post-election power-sharing pact but she told reporters in London on Wednesday the negotiations had stalled and her members would probably quit parliament before the vote.

She is due to hold a news conference in London at 1100 GMT to announce her decision.

Despite Bhutto's insistence that negotiations had stalled, Musharraf's emissaries are believed to be in contact with her camp to settle some kind of agreement.

"I'm guardedly optimistic that something positive will happen in the next few hours in terms of national reconciliation," said Deputy Information Minister Tariq Azim Khan.

The government has moved to address one of Bhutto's main demands, saying on Tuesday it had decided to drop corruption charges against her and other civilian leaders.

She said the announcement was "disinformation".

The draft of a national reconciliation ordinance, as the government order on dropping graft charges is called, was being finalised, a government official said.

Self-exiled Bhutto, 54, plans to return to Pakistan on Oct. 18 after eight years' absence to lead her party in a general election due by mid-January, in which Musharraf's ruling coalition is expected to fare badly.

Musharraf has promised to quit the army if he is re-elected and on Tuesday he nominated former intelligence chief Ashfaq Parvez Kayani as the next army commander in the clearest sign yet he would keep his vow and hang up his uniform.