LAHORE (Reuters) - The brother of ousted Pakistani leader Nawaz Sharif will not contest a parliamentary by-election for the vacant seat, party sources said on Tuesday, effectively scuttling previous plans for him to take over as prime minister in September.

FILE PHOTO: Shahbaz Sharif, Chief Minister of Punjab Province and brother of Pakistan's Prime Minister Nawaz Sharif, gestures after appearing before a Joint Investigation Team (JIT) in Islamabad, Pakistan June 17, 2017. REUTERS/Faisal Mahmood/File Photo

Sharif, 68, was disqualified by the Supreme Court last month but kept his grip on the ruling Pakistan Muslim League-Nawaz (PML-N) party and outlined plans for Shahid Khaqan Abbasi to act as interim prime minister until his brother, Shahbaz, becomes eligible to take over by winning the by-election.

But Sharif and PML-N leadership have decided that Shahbaz should continue in his role as chief minister of the politically vital Punjab province that accounts for more than half of Pakistan’s 190 million people.

“Shahbaz will definitely not contest for NA 120,” said one of Shahbaz’s aides in Lahore, referring to the National Assembly seat left vacant by Nawaz.

A senior PML-N figure in Lahore confirmed that the chief minister would not be contesting the seat, a move likely to leave Abbasi in charge until the next general elections, likely in mid-2018.

PML-N officials say the main reason why Shahbaz may not take over is linked to the general elections and the party’s fears that its grip on the vital Punjab province will weaken if he steps down as chief minister.

The way Pakistan’s political system is set up means any party that sweeps Punjab will most likely go on to form a government after the 2018 poll.

Nawaz resigned last month after the Supreme Court disqualified him for not declaring a small source of income - something he rejects receiving.

The veteran leader has criticized the court’s decision and on Wednesday plans to begin a two-day drive to Lahore via all the major towns along the way, a move that his supporters say will show how popular he remains with voters.

His supporters also argue that it is not clear if the Supreme Court disqualification means he is barred from contesting the next election.