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By Aisha Chowdhry

ISLAMABAD (Reuters) - Pakistan's increasingly assertive Supreme Court appeared to have gained the upper hand in a standoff with the government on Tuesday after the prime minister indicated he might be willing to re-open corruption cases against the president.

Prime Minister Raja Pervez Ashraf told the court he would tell the law minister to withdraw a previous request to Swiss authorities to freeze corruption investigations of President Asif Ali Zardari, easing tension at least temporarily.

It was not clear whether he was stalling for time or would make a serious effort to meet the demands of the Supreme Court, which has emerged as a power center, taking on civilian leaders as well as the country's powerful military.

Ashraf, who could be charged with contempt of court or face disqualification if he does not comply, has until September 25 to submit a draft of a letter to Swiss authorities asking them to reopen a corruption case against Zardari.

"Time will tell. It's our job to implement whatever has been directed," Law Minister Farooq Hamid Naek told Reuters.

"The letter when dispatched will also contain the reservations the federal government had."

Legal experts were also cautious in their interpretation.

"The legal effect of the letter when written should mean opening of the cases that had been closed earlier," said lawyer Chaudhry Ramzan, a member of the Pakistan Bar Council.

"But it (the case) will be reopened subject to the law of that country (Switzerland) and the international immunity available to heads of state."

The long-running saga between the judiciary and the government has distracted leaders from tackling wide-ranging problems - from a fragile economy to a Taliban insurgency in Pakistan, a strategic U.S. ally.

Supreme Court Judge Asif Saeed Khosa said Ashraf was "exempt" from taking action until September 25.

Ashraf's predecessor, Yusuf Raza Gilani, was declared in contempt of court in June over the same issue and disqualified from holding the post of prime minister.

Zardari, the widower of assassinated former prime minister Benazir Bhutto, is a co-chairman of the Pakistan People's Party (PPP), which leads the ruling coalition.

Both Ashraf and his predecessor, Gilani, are senior members of the party and are thus reluctant to take steps to reopen a graft investigation involving their party leader and president.

If Ashraf is disqualified, the PPP can nominate a new prime minister since it has a comfortable majority in parliament.

Thousands of corruption cases were thrown out in 2007 by an amnesty law passed under former military president Pervez Musharraf, paving the way for a return to civilian rule.

Two years later, the Supreme Court ruled that agreement illegal, and ordered the reopening of money laundering cases against Zardari that involved Swiss bank accounts.

The government has refused to obey the court's order to contact Swiss authorities to reopen the cases, arguing Zardari had immunity as head of state.

The PPP will be hoping to hold on to power in the next general election, due next year.

(Writing by Michael Georgy; Editing by Nick Macfie)

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