"We will fully take part in local government elections," said Musharraf who heads the All Pakistan Muslim League.
He dismissed speculation about him joining the Muttahida Qaumi Movement (MQM) and said his party would contest the forthcoming local elections independently.
Musharraf, 71, told a gathering in Karachi that there had been recent meetings between him and MQM leaders but said it was just to discuss the political scenario.
"They were more courtesy calls and nothing more," he said.
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"The party is incomplete without reorganisation. However, it should be at grassroots if you want to bring it at country- wide level," he said.
Noting that politics in Pakistan faces a major challenge, Musharraf said the country progressed during his tenure due to fair distribution of resources.
"Pakistan needs a third political power," he said while speaking on the need for a third political force in the country to save the country from the menace of extremism.
"To me religious terrorism is the most dangerous, because it is against all political forces in the country," he said.
Elections to elect local government representatives are expected to take place in three provinces later this year.