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Pakistan's ruling coalition said on Tuesday the army would not intervene to support embattled President Pervez Musharraf, whom the government says it will impeach for years of alleged misrule.

Musharraf has been at the centre of a political crisis since early last year. The threat to his presidency has raised fears among the United States and its allies for the stability of the nuclear-armed Muslim country, which is also a hiding place for al Qaeda leaders.

Speculation has been rife that former army chief Musharraf, a firm U.S. ally, would quit, though his spokesman has said the ex-commando will not stand down.

The prospect of a showdown between the government and the president is unnerving investors, with the rupee setting a new low for the second consecutive day.

A key question is how the army, which has ruled for more than half the 61 years since the country's creation, will react. But coalition leaders said the army and its main security agency would not intervene to back up their old boss.

"I am sure the ISI is not involved in politics nor will it (get involved)," said Asif Ali Zardari, widower of former prime minister Benazir Bhutto, referring to the military's Inter-Services Intelligence agency.

Zardari, whose party leads the coalition, told private Geo Television in an interview: "The army is my army ... I think the army is not involved (in politics)."

Zardari's coalition government said last week it would impeach Musharraf for plunging Pakistan into a political and economic mess during his nearly nine-year rule.

The army is led by General Ashfaq Kayani, chosen by Musharraf to take over when he gave up command last year. Kayani has not commented but a newspaper reported him as telling Musharraf he did not want to get dragged in to the controversy.

Prime Minister Yousaf Raza Gilani told reporters: "I assure you that General Kayani is highly professional and he is pro-democracy."

"TIDAL WAVE"

Coalition officials hope the president, who has been isolated since his allies were routed in February elections, will resign. If not, they will move an impeachment motion this month.

Analysts say it could take several weeks before a vote in a joint sitting of the bicameral parliament.

The government does not have the two-thirds majority needed to impeach, but says it is confident it will win the vote.

"The tidal wave is sweeping the country. Even his own former allies are now voting against him," Information Minister Sherry Rehman told reporters.

Several Musharraf allies, including members of the old ruling party that backed him, have said they would vote against him and have supported resolutions in provincial assemblies calling on him to face a vote of confidence or be impeached.

Musharraf has anchored Pakistan's support for the U.S.-led campaign against al Qaeda since 2001. The new government has vowed to maintain this backing, even though it is deeply unpopular with many Pakistanis.

The United States has urged the government to focus on a deteriorating economy and spreading militancy but has not commented on the impeachment, saying it is a Pakistani issue.

Musharraf's popularity began to evaporate last year when he clashed with the judiciary and imposed emergency rule to ensure another term.

The benchmark stock index is trading near year lows and the

rupee closed at a record low of about 73.70/80 to the dollar.

(Editing by Robert Birsel and Mark Trevelyan)