Former Pakistani Prime Minister Nawaz Sharif says his PML-N party is pulling out of the country's multi-party governing coalition.
He has been in dispute with the country's biggest party, the PPP, over who should be the next president.
The two sides also disagree on the reinstatement of judges sacked by former President Pervez Musharraf.
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'Constructive role'
Mr Sharif told journalists in Islamabad that the PPP had broken promises, in particular over the issue of the judges. "When written documents are repeatedly flouted, trust cannot remain," he said. "We cannot find a ray of hope."
However, he said his party wanted to play a constructive role in opposition, indicating that he will not try to bring down the government for now.
PPP leader Asif Zardari, whose wife Benazir Bhutto was assassinated in December, has announced that he will stand for the presidential election on 6 September.
Mr Sharif now says his party will put up a candidate against him.
Uncomfortable
The PPP fears that if all the judges sacked by Mr Musharraf get their jobs back, they may invalidate an amnesty that paved the way for Mr Zardari and Ms Bhutto to return to the country last year.
That would leave Mr Zardari open to prosecution on long-standing corruption charges.
The BBC's Charles Haviland in Islamabad says the PPP has other parties in coalition and the government will not fall. However, the PPP may find Mr Sharif to be an uncomfortably powerful figure to have in opposition at a time when the country lacks a sense of political direction.
Mr Zardari and Mr Sharif worked together to threaten Mr Musharraf with impeachment which led him to resign last week.
The two party leaders had also agreed to reduce the powers of the presidency in a country where the president has in the past dismissed democratically elected governments.
Mr Sharif says as long as the presidency remains a powerful post, a non-partisan candidate acceptable to everyone, rather than Mr Zardari, should have been agreed on.
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(BBC)
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