"We will continue to be engaged in talks with (Sharif) and will not let him run away," Zardari said.

Except for the finance portfolio, the other eight cabinet slots vacated by the PML-N on Tuesday will remain vacant and "we will wait for (PML-N chief) Nawaz Sharif to come back", he said.

He added that he was not willing to opt for seeking the support of the opposition PML-Q for the government.

However, the PPP has decided to nominate a new finance minister to replace senior PML-N leader Ishaq Dar to keep on track the crucial exercise of presenting the budget next month.

The budget will have to address pressing problems like inflation and spiralling price rise and the government does not want the exercise to be disturbed.

Zardari said the name of the new finance minister would be announced today by Prime Minister Yousuf Raza Gilani. The Dawn newspaper quoted sources as saying that senior banker Shaukat Tareen had been tipped for the job and was expected to join the government as an "advisor".

PPP sources, however, said the party had also worked out a list of potential candidates to replace the PML-N ministers if Sharif's party stuck to its decision not to be part of the government.

The PML-N pulled out of the ruling coalition on Tuesday after the expiry of the second deadline for reinstating judges sacked by President Pervez Musharraf for not endorsing last year's emergency rule.

Sharif said his party would continue to support the PPP-led government on the basis of issues. PML-N spokesman Siddique-ul-Farooq said on Tuesday morning that his party's nine federal ministers would meet the Prime Minister at one pm and submit their resignations.

However, Zardari told Geo News late on Monday night from London that differences are a part of democracy and the PPP would continue its talks with the PML-N to solve the impasse over restoring the judges so that the government could focus on other pressing issues, like providing food, shelter and clothing to the poor.

The PPP and PML-N are still allies and had very good contacts, he said. The PPP "firmly believes in the restoration of the judiciary but there are some differences with the PML-N" which the two parties are trying to resolve, he added.

The PPP would also keep supporting the PML-N-led coalition government in Punjab province, Zardari said.

The PPP will function as an "iron wall" in Punjab against any element that tries to destabilise the PML-N's provincial government, he said.

Zardari pointed out that the impeachment of President Musharraf would be possible only after the coalition secured a two-thirds majority in parliament.

He acknowledged that he had had "good talks" with the Muttahida Qaumi Movement but said there was no move at present to induct that party into the federal cabinet.

The MQM is currently a partner in the PPP-led coalition government in Sindh province. Zardari said "some friends" had reservations about the MQM joining the federal cabinet, and "we want to keep such friends".