The Karachi-based Muttehida Qaumi Movement (MQM) was demanding restitution of local government system earlier introduced by President Pervez Musharraf in whole of the country.

Ebad issued two ordinances on Sunday for the revival of the 2001 local government system in Karachi and Hyderabad as well as the restoration of the previous delimitation of both districts.

The decision, being termed as the “first phase” of an agreement, came following long negotiations between the MQM, represented by Ebad, and the Pakistan Peoples Party, represented by Sen. Babar Awan.

Talking to the media at the Governor House after the talks, the Sindh governor said that the decision to remove all differences between the PPP and the MQM had been taken via the ordinances, and reflected the will of President Asif Ali Zardari, Prime Minister Yousaf Raza Gilani and MQM chief Altaf Hussain.

Awan said that two ordinances, and not three, as was being initially reported, had been signed.

He gave details of the phases of negotiations that had taken place. The first phase took place in Islamabad between the governor and Awan, the second took place at the Governor House in Karachi, the third at the Sindh Chief Minister House, and then the last one at the Governor House again, after which the ordinances were signed.

He said that the decisions were in the best interest of strengthening democracy, and stressed that there was no lack of trust between the MQM and PPP, nor was there any deadlock at any stage.

Babar Awan stated, ”We badly need peace in Karachi. The port city is the financial capital of Pakistan. We have realized the demands of the MQM genuine.”

He added that the ordinances were the first phase of an agreement, and that many more decisions would continue to unfold in coming days in the run up to Eid-Al-Fitr.

Awan also said that it was agreed in the negotiations that the Police Order 2002 would not be restored and that it was best that it was done away with.

He said that it was also agreed that the governor would regain control of the education boards in the province, though there would be no legislation on the matter, but just a verbal agreement.

Awan added that all of the petitions filed in the courts on the matter would be withdrawn.

The MQM and the PPP have been mercurial allies, with the MQM frequently breaking away from the PPP-led coalition for a variety of policy differences. Most analysts, however, agree that the single biggest difference between the two parties is that over elected local governments in Sindh.