ISLAMABAD - PAKISTAN President Pervez Musharraf on Thursday dismissed speculation that he was going to resign, blasting 'rumour-mongers' for spreading stories that he has lost the army's support, state media said.

The US-backed leader said reports that he had met with the country's army chief to discuss quitting were 'part of a malicious campaign to create unrest in the country,' the official Associated Press of Pakistan said.

He told a dinner at the presidential palace attended by Prime Minister Yousaf Raza Gilani and army chief General Ashfaq Kayani that 'the rumour-mongers wish to create differences' between him and the army, it said.

Mr Musharraf said the 'trend must not continue as it was damaging for the country's economy and a threat to foreign investment,' the state news agency reported.

The army earlier dismissed a report in The News, an English-language daily, that Musharraf and Kayani had discussed his resignation in a meeting on Wednesday night.

The military also played down the revelation that a Musharraf loyalist has been replaced as head of an elite army unit, which has been deployed during previous military coups. -- AFP