Egypt's military rulers plan to scrap a law that has severely restricted the formation of political parties, a government official said, the latest liberalisation of the strict regime of ousted President Hosni Mubarak.
The official said that the restrictions that gave Mr Mubarak a virtual veto over establishment of political parties would be lifted after a referendum next week on constitutional changes to allow for fair parliamentary and presidential elections.
Alongside the pledge for reform, that was a clear statement that the rulers are rejecting demands by reformers to postpone or call off the referendum.
New political parties will only need to notify authorities of their formation. Under Mr Mubarak, they had to receive approval from a committee dominated by his ruling party, which ensured his control over rivals.
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 Mr Mubarak to rule for three decades and gave his ruling National Democratic Party a veto over who could run against him.
Critics said the changes do not go deep enough to change what they see as a faulty constitution, nor do they 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 old that political players, such as Mr Mubarak's ruling party or the Muslim Brotherhood, would take control of a new parliament.
The Brotherhood, Egypt's best organised political group, welcomed the proposed amendments and said it will vote in favour.