CAIRO // Egypt's Islamist rulers are facing the worst economic and political crisis since Mohammed Morsi took office as president in June.
As the president's supporters geared up for a referendum on the constitution on Saturday, opposition forces were preparing for a massive demonstration today against the vote.
Meanwhile, by presidential decree, the military assumed joint responsibility with the police for security until the result of the referendum is announced.
The decree grants the military the right to arrest civilians, but presidential spokesman Yasser Ali denied that it was a declaration of martial law.
"It is merely a measure to extend legal cover for the armed forces while they are used to maintain security," Mr Ali said.
Mr Morsi's political backers, the Muslim Brotherhood and its Freedom and Justice Party, were also beginning to grapple with the consequences of the president's diminished clout.
Islamist groups have shown in every election since the uprising that unseated Hosni Mubarak last year that they can mobilise voters in huge numbers. They won a near-majority in the first parliament and helped Mr Morsi to edge out Mubarak's former prime minister Ahmed Shafiq in presidential elections.
Yet they calculate that their long-term political prospects will be guaranteed more by Mr Morsi's ability to make an impact on the lives of everyday Egyptians than transitional issues such as a new constitution. Supporters have already begun putting up billboards around Cairo that read: "With the Constitution, the wheel will turn", suggesting that the economy is at risk without the stability offered by the new charter.
Mr Morsi showed signs of indecision yesterday when he announced a delay in the implementation of a new raft of taxes the government had signed into effect to help to close Egypt's fiscal deficit. His office said he was suspending the taxes until a public discussion could be held about their impact.
Cabinet officials told the Egypt Independent newspaper they had not been told in advance about the delay.
"The problem he faces is that there are a number of things he must do for the economy that will make people hate him even more," said Abdel Moneim Said, the head of the Al Ahram Centre for Political and Strategic Studies. "It was a big challenge even before this political crisis. His house is in disorder."
The Salafists, whose main political party was the second most successful in parliamentary elections, will also exact a price from the president for their support for the constitution, he said.
"There will be even more pressure on him to implement the religious parts of the constitution," he said.
If the constitution is not passed in the referendum, then Islamists still stand a strong chance of holding a majority in a new constitutional assembly because Mr Morsi's latest declaration calls for a direct election to create a new assembly if the vote fails.
The dilemma has helped liberal and secular groups maintain their unity through the umbrella opposition group, the National Salvation Front. The group's top members see the options presented by the president as untenable: either a constitution they consider deeply flawed is enacted or a new constitutional assembly will be created with a likely Islamist majority.
Several of the most influential groups and leaders of the Front were pushing for a boycott of the referendum on the constitution.
The National Salvation Front has not specifically used the word boycott in their statements, choosing instead to say they were completely against it "from top to bottom" in a news conference on Sunday night. Some leaders, such as the leader of the liberal Free Egyptians party, Ahmed Said, have called for a boycott because taking part in the voting would give "legitimacy" to the process that created the constitution.
The Front has called for large demonstrations today in a show of force. They have also publicly mulled a general strike to increase the pressure on the president.
Opposition leaders refused Mr Morsi's offer for "national dialogue" on Saturday, saying they will only negotiate if the president cancels the referendum. They saw his new constitutional declaration, which ended powers he had given himself last month that were above judicial oversight, as a hollow gesture.
Another major stumbling block for the referendum would come if a broad coalition of judges refuse to oversee its proceedings on Saturday. The Supreme Judicial Council has said its members would staff polling booths across the country, but the Judges' Club, a more confrontational group of judges, has not yet revealed whether it would participate. Mr Morsi's new declaration was, in part, an attempt to assuage the judiciary after he placed his decisions above the law in the November 22 declaration.
* Additional reporting by the Associated Press