A well-informed source told PTI that Shaharyar, who is in London these days on his summer vacations, had spoken to the Prime Minister who is also in London for his medical treatment.
"He has now been told by the patron in chief of the PCB that he should continue working and not step down in August as he had planned earlier," the source disclosed.
His main grouse was that unlike other cricket playing nations in Pakistan whenever the team performed badly the media and former players always turned on the board officials and demanded their sacking.
But the source said the scenario had changed now and even Shaharyar had agreed to carry on working after a detailed discussion with the premier on cricket affairs.
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The PCB has carried out a number of reforms since the national team's poor performances in the Asia Cup and World T20 in India.
Mudassar yesterday visited Karachi to inspect the work going on at the regional cricket academy in the city and announced it would start functioning again by August 1.
The source said any issues between Shaharyar and his predecessor Najam Sethi who is now heading the executive committee in the board had also been sorted out and the latter had also encouraged Khan to continue working as Chairman.
The source said although the two heavyweights at times didn't agree on some issues but generally were comfortable working together in the board.