Though he does not yet face any charges, the developments mark a major escalation of legal troubles for Musharraf, a one-time U.S. ally who went into self-exile in Britain in 2008 after being forced out of the presidency he secured in a 1999 military coup.
The accusations of a role in Bhutto's death were leveled by a government now run by Musharaff's rivals. They make it nearly impossible for him to fulfill pleges to return to Pakistan and lead a new political party.
Bhutto was killed Dec. 27, 2007, in a gun and suicide bomb attack after returning to Pakistan to campaign in elections Musharraf agreed to allow after months of domestic and international pressure. Musharraf blamed the Pakistani Taliban, an al-Qaida affiliated group, for the attack, but government prosecutors now allege he was part of the plot to kill the popular former premier.
"A joint investigation team in its report to the court has found Musharraf guilty of being involved in the conspiracy and abetting to kill Benazir Bhutto," said Zulfikar Ali Chaudhry, the lead prosecutor.
He said the probe has evidence that Musharraf was "completely involved" through Baitullah Mehsud, the late leader of the Pakistani Taliban, and that prosecutors are seeking a murder trial. He did not elaborate.
Musharraf has always denied any role in Bhutto's death and scoffed at critics who said he did not do enough to protect her. Mehsud, who was killed in a U.S. missile strike in 2009, also denied targeting Bhutto.
Musharraf's lawyer, Mohammad Ali Saif, said his client was innocent of any allegations but had no plans to contest them in court, where he's been ordered to appear on Feb. 19.
"This is just a drama. It is all politics," Saif told The Associated Press. He said Pakistani investigators never tried to reach Musharraf about the case, whose proceedings are closed to the public.
The new accusations and arrest warrant stem from a case against two security officials accused of being derelict in their duties to protect Bhutto. Musharraf has not been indicted, but the court is conducting preliminary hearings about the accusations against him, and he will have an opportunity to defend himself.
A U.N. investigation into the assassination said Musharraf's government didn't do enough to ensure Bhutto's security and criticized steps taken by investigators after her death, including hosing down the crime scene and failing to perform an autopsy.
The U.N. officials were not tasked with finding out who the exact culprits behind the killing were. But they identified two main threats facing Bhutto - Islamist extremists like al-Qaida and the Taliban who opposed her links to the West and secular outlook, and members of the "Pakistani Establishment," the term used locally to refer to a powerful and shady network of military, intelligence, political and business leaders said to actually control the country.
After her death, Bhutto's Pakistan People's Party rode a wave of public sympathy to garner the most seats in the February 2008 elections. Months later, the party forced Musharraf to quit the presidency by threatening impeachment. He later left for London, and has since spent a good deal of time on the lecture circuit, including in the United States.
Britain does not have an extradition treaty with Pakistan, but the British government can decide to extradite those accused of crimes on a case by case basis.
Federal Information Minister Firdous Ashiq Awan said if the court requests it, the government will contact Interpol about bringing Musharraf in.
The U.S. backed Musharraf for much of his military rule because he was, at least officially, an ally in the American-led war on global terrorism, and provided Washington assistance in pursuing militants who used Pakistan's soil as a hideout to prepare attacks in neighboring Afghanistan.
But many in Pakistan resented his alliance with the U.S., and his domestic missteps, including attempts to fire the chief justice of the Supreme Court, pummeled his popularity, leading to mass protests that ultimately forced Musharraf to bend and allow fresh elections.
The new Pakistani president and head of the ruling People's Party is Asif Ali Zardari, Bhutto's widower. He also supports the U.S. and has backed offensives against militants on Pakistani territory.
Also Saturday, a man detonated explosives as army troops prepared to storm his hideout in northwest Pakistan, killing himself and wounding at least three soldiers, a senior army official said.
The blast occurred outside the town of Bhat Khela in Khyber Pakhtunkwa province after troops acting on a tip from residents surrounded a militant hideout, Brig. Saeed Ullah said. Soldiers killed a second militant in the shootout that followed the explosion.
Ullah said security forces detained five men from the area on suspicion of sheltering the militants, who he said were planning a suicide attack in the Swat Valley. Bhat Khela is located about 30 miles (50 kilometers) west of Mingora, the main town in Swat.
The Pakistani army launched a major anti-Taliban offensive in 2009 in Swat, a one-time tourist haven largely overrun by militants beginning in 2007.
Though the monthslong offensive was hailed a success, militant activity is still reported in the picturesque region and concerns are growing that the insurgents could rise again.
Associated Press Writer Sherin Zada contributed to this report from Mingora.