The protesters complain that power handover is coming soon and will deny parties a chance to campaign [Reuters]

Egypt's military rulers are opening up political space by scrapping a law that has severely restricted the formation of new political parties, a government official has said.

The official, who declined to be named because he is not authorised to speak to reporters, said on Saturday that the restrictions that gave ousted President Hosni Mubarak a virtual veto over establishment of political parties would be lifted after a referendum next week on constitutional changes.

The move, the latest liberalisation of the strict regime of Mubarak, would pave the way for fair parliamentary and presidential elections.

It comes days after Essam Sharaf, the new prime minister, unveiled a cabinet that includes new ministers for the key posts of foreign, interior and justice.

The official said new political parties would only need to notify authorities of their formation.

Under Mubarak, they had to receive approval from a committee dominated by the National Democratic Party (NDP), the ruling party which ensured the president's control over his rivals.

'Changes not enough'

The referendum scheduled for March 19 asks Egyptians to vote on changes that would loosen restrictions on who could run for president, opening the field to independents and candidates from small opposition parties.

Also, it would impose a two-term limit on future presidents.

The previous system allowed Mubarak to rule for three decades and gave the NDP a veto over who could run against him.

Critics say the changes are cosmetic and will neither change what they view as a faulty constitution, nor limit the powers of the next president.

The protesters also complain the plan to hand over power to a civilian administration six months after the military took charge means that parliamentary elections would come too soon and deny new political parties a chance to campaign. They fear that political players, such as the NDP or the Muslim Brotherhood, would take control of a new parliament.

The Brotherhood, Egypt's hitherto banned but best organised political group, welcomed the proposed amendments and said it will vote in favour.

The group's spokesman, Essam el-Erian, said in a statement on the group's website on Saturday that the changes require a new parliament to write a new constitution that would meet further calls for change.

Sadat suspects released

Meanwhile , two cousins jailed for their role in the assassination of Egypt's president Anwar Sadat in 1981 were released on Saturday to a huge welcome, their lawyer, Nizar Ghorab, said.

The military council ordered their release on Thursday.

Abboud and Tarek el-Zomor served multiple sentences for the fatal shooting of Sadat during a Cairo military parade. Ghorab said they were kept in prison because Mubarak's regime feared their return to political life.

The pair were convicted in 1984 of plotting the assassination and of belonging to the outlawed Islamic Jihad group - but not of actually killing Sadat. The five prime suspects, including the shooter, were captured and executed.

Tarek el-Zomor was ordered released in July 2005, but he stayed in prison because of an interior ministry's discretionary power to hold a prisoner for up to five more years on security grounds.

Abboud el-Zomor was also expected to be released after serving his term, but was kept behind bars on the same grounds. 

Source: Agencies