Khan was dismissed as a scientific adviser to the prime minister "in the background of the investigations into alleged acts of nuclear proliferation by a few individuals and to facilitate those investigations in a free and objective manner," the government said in a statement.

Khan -- who had held the advisory position since retiring as head of the country's top nuclear facility in 2001 -- has become a a key suspect in allegations that Pakistani scientists sold nuclear weapons technology to countries including Iran and Libya. The probe was launched in November after Iran provided information to the UN nuclear watchdog.

It wasn't immediately clear if further legal action would be taken against Khan or others accused in the investigation.

President Pervez Musharraf chaired a meeting yesterday of Pakistan's National Command Authority, which controls the country's nuclear assets. The top officials were informed that the investigation "was nearly concluded and appropriate action will be taken against those found guilty," the military said in a statement.

The statement also reiterated that the nuclear program was only intended to deter Pakistan's enemies and "it would never be in the national interest to share this technology in whatever form with any other country."

Six scientists and security officials from the nuclear facility -- the Khan Research Laboratories, named after Khan -- are being held in the probe over allegations of nuclear transfers to Iran and Libya. Khan was not arrested, but acquaintances said he has been restricted to the capital, Islamabad.

Analysts had said a decision to punish top scientists, particularly Khan, would be a tough one for Musharraf and would likely trigger an angry reaction from nationalists. Khan remains an icon of impoverished Pakistan's successful campaign to create a formidable nuclear defense against a much larger foe, India.

Officials have said that Khan and a top aide, Mohammed Farooq, have failed to account for money in personal bank accounts. Farooq is among the six scientists in custody.

Khan and Farooq have told investigators they didn't supply any technology to Iran and Libya, and Khan has maintained he did nothing to damage the interests of Pakistan, officials said.

Earlier yesterday, officials said loose controls at Khan's laboratory allowed a small number of its employees to profit from the nuclear black market. Those findings were to have been reviewed by Musharraf at the yesterday's meeting.

Pakistan's government says it never sanctioned transfers of nuclear technology to other countries and will act against anyone guilty of doing so. The government has publicly acknowledged "one or two people" acted for personal gain.

Born in present-day India in 1935, Khan emigrated to Pakistan in 1952, five years after its partition from India, He earned a doctorate in metallurgy in Belgium, and has been awarded Pakistan's highest civilian award twice the only person so honored.

Khan worked in the Netherlands at a subsidiary of the British-German-Dutch nuclear conglomerate URENCO in 1972-76 before returning home to start Pakistan's nuclear program, which tested its first nuclear device in 1998.

In 1983, a Dutch court convicted Khan in absentia of stealing confidential material from URENCO and sentenced him to four years in prison. He denied the charge and the conviction was later overturned on a technicality.