Sharif is drawing up plans to tour the country to stump for his Pakistan Muslim League-N party, even though election authorities have rejected his own candidacy, said Sadiq ul-Farooq, senior party official.
The two-time premier will travel to the cities of Faisalabad , Multan , Rawalpindi , Quetta , Karachi and Peshawar in the coming days, ul-Farooq said.
"We will sweep the elections if given a level playing field," he claimed.
Greater participation will make the parliamentary elections look more open, bolstering Musharraf's democratic credentials, which took a hit over his Nov. 3 declaration of a state of emergency and his dismissal of independent-minded judges.
But having powerful opponents like Sharif and another former prime minister, Benazir Bhutto, in the field could siphon votes and seats from Musharraf's party, weakening the U.S.-backed leader.
While some smaller parties still say they won't participate in the Jan. 8 polls, the prospect of a general opposition boycott has collapsed with decisions by the two largest opposition groups to field candidates, opening the way for a three-corner fight for the right to form the next government.
Sharif had pressed fellow opposition leader Benazir Bhutto to join a boycott, but she said Thursday that her Pakistan People's Party would participate, and Sharif's party announced on Sunday that it couldn't leave the field open to its rivals.
A meeting of the All Parties Democratic Movement, comprised of 33 political groups led by Sharif's group, failed to agree a joint stance, leaving each to decide alone whether to contest.
Musharraf's office welcomed the development.
"The more people who participate in the elections the better it will be for the future of Pakistan ," presidential spokesman Rashid Qureshi said.
The Islamist Jamat-e-Islami party, several nationalist parties and former cricket star turned politician Imran Khan were still pressing for a boycott.
"By going to the polls, in fact we will give legitimacy to Pervez Musharraf and his illegal acts," said Syed Munawar Hasan, secretary general of Jamat-e-Islami.
Bhutto has said the opposition still has the option to pull out of the election race later or launch protests after the results are announced.
Musharraf said Sunday that he guaranteed the elections will be "free and fair."
"We haven't even gone for elections and they are talking of rigging and everything," the former army general told CNN in an interview. "This is a clear indication of their preparation for defeat. Now when they lose, they'll have a good rationale, that it is all rigged, it is all fraud. In Pakistan , the loser always cries, and that is an unfortunate part."
The president, who left his army position last month, eight years after taking power in a coup that ousted Sharif, said he will lift the emergency next weekend.
That will meet a key demand of his domestic opponents and foreign backers such as the United States , who want the election to produce a stable, moderate government committed to fighting Islamic extremism.
In the latest violence, a suicide car bomber hit a bus on an army base in the town of Kamra , 50 kilometers (30 miles) northwest of Islamabad , injuring at least five children on their way to school, the military said.
A broad election boycott would have undermined Musharraf's efforts to legitimize the new presidential term he won in October.
Musharraf used the emergency to purge the Supreme Court just before it was to rule on the legality of him seeking another term while still head of the army.
The retooled court swiftly approved his re-election. Opponents argue that judges are now too cowed to intervene against any rigging during the election.