Islamabad - Pakistani President Pervez Musharraf on Monday resigned from his post in what he called "the best interest of the country" to avoid facing an impeachment planned by the ruling coalition in parliament.

"No charge sheet can stand against me," a defiant Musharraf said. "My actions were in accordance with my philosophy of Pakistan first."

"It is not a time of individual bravado," he said in his emotional address to the nation. "Whether I win or lose the impeachment, this country will be defeated."

He said he did not want to take any action that might "prolong the environment of political uncertainty in the country," apparently referring to his powers to dissolve the parliament, a situation that would "pitch the parliament against the judiciary" and "drag the military into the matter."

The resignation was formally handed in to the speaker of the National Assembly, lower house of the parliament, and accepted immediately. The upper house Senate chairman Mohammadmian Soomro took over as the interim president until the new leader is elected.

Musharraf made no mention of whether he would stay in the country or go into exile, as is being reported by several media outlets.

US-based Newsweek magazine cited a close aide to Musharraf as saying the president would "fly into exile in Saudi Arabia, where he is to remain for the next three months."

Musharraf, who took over in a bloodless military coup in 1999 and ruled the country with absolute authority for the first eight years, is facing parliamentary trial on charges of "gross misconduct and violation of the constitution," the country's ruling coalition announced on August 7.

But he denied the charges. "Pakistan is my mission. I have put my life at stake to defend this nation and this country, and I will keep on doing so."

The ruling coalition welcomed the president's resignation. "It will bring, hopefully, stability in Pakistan," said Foreign Minister Shah Mehmood Qureshi.

Meanwhile, Pakistan's crumbling markets showed immediate revival following the resignation of Musharraf. The benchmark KSE-100 index shot up by 4.5 per cent or 460 points to close at 10,719 as investors felt the development will cool off political tensions.

The rupee also made a gain of over 1 per cent to trade at 75/76 (buying/selling) against the dollar in the open market as compared with 76.50/77 on Friday.

Pressure had been mounting on the president to step down. Four provincial assemblies, which make up the presidential electoral college, together with both houses of parliament, asked him to call a vote of confidence in his leadership or resign.

Musharraf showed initial defiance, but Newsweek said he gave up resistance after his handpicked successor as military chief, General Ashfaq Parvez Kayani, told him that the army was not backing him anymore.

Some of Musharraf's close friends are believed to have held backroom negotiations with the Pakistan People's Party (PPP), the leading party in the ruling coalition, to secure legal immunity for presidential actions since the 1999 coup in return for him resigning voluntarily.

Last week, senior US, British and Saudi officials also made hectic diplomatic efforts to broker a deal before the coalition planned to introduce the impeachment resolution in the lower house Tuesday.

The popularity of Musharraf, a key US ally in the fight against Islamic extremism, began to plummet in March 2007 when he axed then-chief justice Iftikhar Chaudhry, an independent jurist who had ruled against the president on several sensitive issues.

Faced with nationwide protests, Musharraf reinstated Chaudhry in July 2007 - only to sack him again on November 3 under an emergency order. That move came when the Supreme Court was set to rule on the validity of Musharraf's re-election for a second term.

The measure attracted wide criticism from the Pakistani public as well as international rights organizations and led to a thrashing defeat of his political allies in February 18 elections.

The international community gave a mixed reaction on the development. In a cautious tone, European Commission said "it considers the resignations as a matter of internal politics in Pakistan."