The general, who took power in a 1999 military coup, has already said the government and army were not involved in the sale of nuclear technology to Libya and two "axis of evil" countries, Iran and North Korea.
Instead, he has blamed scientists acting for personal gain. Last week, the mastermind of Pakistan's nuclear programme, Abdul Qadeer Khan, was sacked as adviser to the prime minister on science after reportedly confessing to his role.
But can Musharraf let national heroes such as Khan carry the can, when many Pakistanis and diplomats think they could not have acted without the knowledge and involvement of the military?
"The backlash now is against the army," said Najam Sethi, editor of the Daily Times.
"It is against Musharraf for being an American stooge and against the army, for protecting their own and sacrificing scientists who played such a valuable role."
Musharraf's won plaudits from outside Pakistan for what was seen as a brave decision to investigate the alleged transfer of uranium enrichment technology to so-called "rogue states" in the 1980s and 1990s.
But he may have had little choice when faced with overwhelming evidence from the International Atomic Energy Agency (IAEA) and from Iran and Libya themselves.
Retired General Talat Masood is critical of the decision to turn the investigation over to the country's military intelligence agency and declare that the army was not involved.
"The real question is whether everyone is equal in law or whether there are some people who are above the law," he said.
"Such institutions also have to take the blame."
Khan is widely reported to have said he was acting on the indirect instructions of two former army chiefs, General Aslam Beg and General Jehangir Karamat.
Beg denies the accusation. Never in Pakistan's post-independence history has a former army chief been made accountable for his actions, and many doubt Musharraf would mount a serious investigation into one of his predecessors.
"There may be even a backlash in the armed forces if he were to do that," said Sethi. "There are a lot of people in the Pakistan army who want to thumb their noses at the US."
Investigating Khan is no less fraught. Many Pakistanis have been brought up to revere the "father of the Islamic bomb", who has become the most decorated citizen in the country.
Officials have tried to remove some of the aura surrounding Khan in recent weeks by leaking accounts to newspapers of his vast wealth and illegally amassed real estate holdings.
But Musharraf's opponents are not impressed, including leaders of Islamic parties.
"I say Khan has done service to the nation, he is a hero," said Muttahida Majlis-i-Amal leader Qazi Hussain Ahmed. "What have these generals given us? They are a gang of exploiters. They are here to loot the nation."
In a country where corruption among political leaders is the norm, many Pakistanis are inclined to forgive Khan for making money on the side.
Others argue he did no wrong to give nuclear technology to fellow Muslim states, especially when Israel's nuclear arsenal was developed without a similar furore.
There has been speculation that Musharraf has offered Khan a deal: a quiet retirement from public life in return for a confession and future silence.
A prosecution would risk public unrest and potentially damaging exposures by Khan on the extent of military involvement. A full-scale independent investigation is viewed as Musharraf's least likely option.
Diplomats say Washington would probably forgive Musharraf if he chose an easy escape route, especially as they see him as a central ally in the "war on terror" and one already beset by enemies on all sides.
But as the truth continues to leak out, it will be hard for Musharraf to put the genie back in the bottle.
Allegations are circulating that the general himself knew about the nuclear transfers in the 1990s, a charge the country's military spokesman calls "absurd".
Liberals like retired Brigadier Shaukat Qadir says Musharraf should be brave enough to mount a full-scale investigation of the military's role, arguing it could win the president widespread popular support.
"It is something the military considers taboo, but it would make it more acceptable if they held some of their own accountable too, and silence some of the criticism," he said.