In a dramatic U-turn, Egypt’s Islamist President Muhammed Mursi has annulled a controversial decree that had granted him Pharaoh-like powers, even as he rejected the Opposition demand to delay next week’s referendum on a new constitution.

In a major sign of compromise, Mursi revoked the controversial decree that had granted him sweeping powers, but decided that the referendum on the draft constitution would go ahead as planned on December 15.

President Mursi’s dramatic U-turn came after a “national dialogue” held between political leaders which continued after late midnight.

The constitutional referendum will be held on its previously specified date of December 15 and the constitutional declaration issued by President Mursi on November 22 has been largely cancelled, Mohamed Selim al-Awa, an Islamist politician and adviser to Mursi, has announced.

The new constitutional declaration however will be immune from judicial appeal.

According to the new declaration, if a majority of Egyptians vote against the draft constitution, then a new Constituent Assembly will be elected in three months, and will have six months to draft a new one.

The main Opposition National Salvation Front has rejected the referendum on the draft constitution and called for mass street protests on Tuesday.

“We do not recognise the draft constitution because it does not represent the Egyptian people,” it said in a statement. “We reject the referendum which will certainly lead to more division and sedition,” he said.

Islamist movements, including Muslim Brotherhood, have announced that they would also hold a rival demonstration on Tuesday.

Mursi, meanwhile, asked the military to maintain law and order and provide security to state institutions. He also granted the military the power to arrest civilians.

The cancellation of the decree, which put Mursi’s decisions above judicial oversight, was not retroactive, meaning any decisions he made since its announcement still stand.

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