Talks to 'ease out' Mubarak amid protests stalemate

Top officials are understood to be looking at ways of temporarily shifting Hosni Mubarak's control of the country to his vice-president Omar Suleiman.

The 82-year-old continues to resist calls for his immediate resignation despite nearly two weeks of protests, which have included violent street clashes between anti-government demonstrators and pro-Mubarak groups.

Mubarak has insisted he wants to serve out the remaining seven-months of his term.

Opposition leaders claim they have met with Prime Minister Ahmed Shafiq to discuss various proposals that would end in the leader's departure.

One option could see Mubarak remaining in office purely as a figurehead, with real power draining to the vice-presidency.

Mubarak has meanwhile held talks about Egypt's economy after the country was brought to the brink of chaos by demonstrations in several cities.

The upheaval is estimated to have cost hundreds of millions of pounds. Exports from Egypt fell 6% in January due to the unrest, the government said.

It is hoped banks and shops that have been closed for days will be re-opened from Sunday.

The tense atmosphere in central Cairo has calmed since earlier in the week when pro-government mobs clashed with democracy supporters, followed by orchestrated attacks on foreign journalists.

Friday's "day of departure" saw more than 100,000 demonstrators gathering peacefully in the capital's Tahrir Square calling on the president to step down.

Claims that chaos would follow if he were to leave immediately appear to have been supported by Egyptian state TV reports of a "terrorist" bomb attack on gas facilities in North Sinai.

There have also been reports that the newly-appointed vice-president survived an assassination attempt several days ago, although security officials have denied that there was an attempt on his life.

Earlier, US Secretary of State Hillary Clinton urged Middle East leaders to embrace democratic reforms in response to growing unrest in the region.

She told an international security conference in Munich that there was a "perfect storm" which made democratic change a "strategic necessity".

US president Barack Obama has called for a "transition period that begins now".

"We want to see this moment of turmoil turned into a moment of opportunity," he said.

He did not explicitly call for Mubarak to step down immediately, but US officials said the administration has decided that Mr Mubarak needs to go soon if the crisis is to end peacefully.

A statement agreed at a Brussels EU summit yesterday stopped short of calling on Mubarak to step aside, but challenged the regime to honour the terms of a 150 million-a-year EU Association Agreement.

Under the agreement Egypt is committed to pushing through political and economic reforms in return for trade concessions and financial aid.