The first year history student at Christ Church, Oxford, will return to his studies while his father and Bhutto's widower, Asif Ali Zardari, effectively runs the party. Benazir Bhutto's will requested that her husband should take over responsibility for party but he wanted to pass it to his son, a PPP spokesman said.
Makhdoom Amin Fahim, the vice chairman of the party, will be the PPP candidate at Pakistan's parliamentary elections which the party has today agreed it will contest.
The news came after the party of another former prime minister, Nawaz Sharif, said that it would contest elections if Bhutto's party did so.
Pakistan's ruling party said earlier today that the crucial January 8 vote was likely to be postponed by up to four months following the assassination of Benazir Bhutto.
As political maneouvering in the wake of Bhutto's death picked up pace, Mr Sharif's Pakistan Muslim League-N party said it would reverse an earlier decision to boycott the vote if Bhutto's group decided to run in the polls.
The PPP announced its decision to contest the elections after a meeting of 22 senior members of the party at which it was also agreed that Bilawal would share the role of chairman with his father. At a round table beneath a portrait of Benazir Bhutto, Bilawal and Mr Fahim sat side by side.
Tariq Azim, the information secretary of the Pakistan Muslim League-Q, said earlier today that the parliamentary elections would lose credibility if it they are held on January 8, with Bhutto's party in mourning and other opposition groups apparently intent on boycotting.
He expected authorities to announce a delay within 24 hours.
"How long the postponement will be for will up to the Election Commission," he told The Associated Press. "I think we are looking at a delay of a few weeks ... of up to three or four months."
Leaders of her Pakistan People's Party, meanwhile, were meeting today in Bhutto's ancestral home of Naudero in southern Pakistan. Police struggled to control thousands of mourners outside the meeting, who shouted "Musharraf is a killer!" and called for the separation of Bhutto's home province of Sindh from the rest of Pakistan.
Since Thursday, unrest has killed at least 44 people and caused tens of millions of dollars of damage. Rioters have destroyed 176 banks, 34 gas stations, 72 train cars, 18 rail stations, and hundreds of cars and shops, the government says. They have also wrecked nine election offices, along with the voter rolls and ballot boxes inside, hampering the printing of ballot slips and the training of poll workers, the election commission said.
The election commission has called an emergency meeting for Monday.
In fresh violence, two men blew themselves up today close to the residence in eastern Pakistan of Ijazul Haq, the former religious affairs minister and senior leader of the ruling Pakistan Muslim League-Q party, said district police chief Zafar Abbas Bukhari. Both men died, but there were no other casualties.
© Copyright 2007 Times Newspapers Ltd.