The last remaining graft case against Pakistan People's Party chairman Asif Ali Zardari was quashed on Friday removing a final hurdle to him standing as Pakistan's prime minister, as the party continued to be dogged by differences over choosing a nominee to head the new coalition government.

A Pakistani anti-corruption court dropped the last of seven graft cases giving a big reprieve to Zardari, who has emerged as a frontrunner to lead the PPP-Pakistan Muslim League-Nawaz government elbowing past PPP vice-chairman Makhdoom Amin Fahim.

He has already been cleared in six other cases by anti-corruption courts in Rawalpindi earlier this month in line with a Supreme Court order last month.

In the case registered in 2004, Zardari, 51, was accused of importing a BMW [Images] car while allegedly passing himself off as a student in order to evade paying duties.

Acquitting Zardari, Rawalpindi Judge Sagheer Quadri said there was no proof that he had imported the car.

The differences within the PPP over finalising a prime ministerial nominee showed no signs of easing with the once frontrunner and Benazir Bhutto [Images] loyalist Fahim insisting he is still a "very strong" contender.

Amin, who met Zardari for the second time on Thursday night in as many days, also said he was not interested in becoming president or the speaker of the new National Assembly.

However, in an attempt not to take Zardari head on, Fahim said he would be the first person to support the PPP chairman if he expressed a desire to become prime minister.

PPP is expected to name its candidate on March 17, when the first session of the new National Assembly is due to start.

Backroom jostling over sharing of power meanwhile continued with former premier Nawaz Sharif's PML-N demanding strategic ministries like defence.

Fahim, the party vice chairman, was widely considered a front-runner for the slot till he was sidelined by the PPP's top leadership following reports that he had secretly met members of the military establishment and President Pervez Musharraf [Images] without informing Zardari.

With a large number of newly elected MPs of the PPP suggesting that Zardari, husband of slain former premier Benazir Bhutto, should become the premier and the PML-N expressing reservations over Fahim's candidature, Fahim's chances of becoming prime minister have suffered a setback.

Fahim, who met Jamiat Ulema-e-Islam leader Maulana Fazlur Rehman here on Friday, said he was still in touch with Zardari and that no decision had yet been taken on the prime ministerial candidate. He also said he had not met Rehman to ask him to lobby for his candidature.

"The name of the prime minister will come, there is no rush," Fahim said, dismissing reports that he planned to form his own "forward block" within PPP.

"I am the president of the PPP-Parliamentarians and this post is more important for me than that of the country's president," Fahim told reporters when asked if he had been offered either of the two posts.

"I will not become speaker. I do not know how to make speeches," Fahim added.

Asked how he would react if Zardari nominated someone else as prime minister, Fahim said he would express his opinion "when the time comes".

Reports have suggested that Zardari might name a candidate for an interim period and himself become prime minister after contesting by-elections.

There are also reports that the PPP has asked Fahim to withdraw from the race voluntarily because of the PML-N's opposition to his candidature, but Fahim has given no indication that he is willing to budge.