Pakistan's cabinet has recommended a pardon for the man who founded the country's atomic weapons programme but admitted passing nuclear secrets.
Analysts say an open trial of Mr Abdul Qadeer Khan, a national hero for his role in developing a bomb to rival that of old enemy India, could reveal embarrassing evidence implicating the army, which Musharraf heads, and make the scientist a martyr.
They believe Mr Musharraf has already agreed to pardon Mr Khan in return for his apology.
The scientists made a personal apology on national television on Wednesday night. In his address, Mr Khan absolved the government and fellow scientists of blame in an apparent bid by all concerned to limit the fallout at home from what has emerged as one of the greatest nuclear proliferation scandals in history.
Commentators said the confession smacked of a cover-up, possibly part of a wider deal to spare the powerful military unwanted scrutiny in any trial and to allow Musharraf to sidestep pressure from Islamists and nationalists.
"The problem for President Musharraf is no longer related as much to foreign policy as to domestic politics," the Daily Timessaid in its editorial.
"No one believes that the scientists could have smuggled some heavy nuclear hardware abroad without the knowledge of the Pakistan Army, which has been in charge of the nuclear programme."
The paper quoted one official as saying an agreed formula "would allow Dr Khan to live the rest of his life peacefully in Pakistan, while the state would have an assurance that he would refrain from talking on this sensitive subject in the future."
The head of the UN nuclear agency has said the "father" of Pakistan's nuclear bomb would not have worked alone in creating an illicit network to sell nuclear technology to Libya, Iran and North Korea.
"Dr [Abdul Qadeer] Khan is the tip of the iceberg for us," International Atomic Energy Agency chief Mr Mohamed ElBaradei told reporters.
Mr Khan publicly confessed to leaking nuclear secrets yesterday but said that the Pakistan government and military knew nothing of his black-market activities.