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But the new declaration preserves next Saturday as the date of a referendum on a divisive proposed constitution, skirting a key demand of Mr Morsi's opponents.
The President's November 22 declaration set off the worst constitutional crisis to afflict Egyptian politics in decades.
His partial climbdown may ease tensions on the restive streets of Egypt's capital, where fighting between secularists and Islamists killed six people in the past week.
Yesterday's announcement preserves articles in Mr Morsi's original declaration that replaced the Mubarak-appointed public prosecutors and allowed courts to retry former regime officials if new evidence became available.
Many Egyptians blamed the public prosecutor for the light sentences handed down to the country's ousted leaders and police officers accused of corruption and killing protesters.
Mr Morsi's new declaration maintains the accelerated timeline for adopting Egypt's new constitution, defying his opponents' complaints that Saturday's referendum would railroad through an Islamist-tinged constitution.
The concession marks only a mild sacrifice for Mr Morsi, say the President's critics, because the power-expanding decree had already prevented Egypt's Supreme Constitutional Court from dissolving the constitutional drafting committee.
Mr Morsi and his Islamist allies have said the court was stacked with former regime loyalists inimical to Egypt's democratic reforms.
The court had been expected to rule on the legitimacy of the constitutional drafting committee last Sunday, but delayed the decision after Islamist protesters blocked the court's entryway.
With the constitution drafted and its referendum date set, the founding document's passage is now nearly certain.
"It was expected all along that he would do that at the last minute," said Bassem Sabry, a secular-leaning blogger and political analyst, of Mr Morsi's decision. "After he got everything he wanted from the decree, he rescinded the decree and got some political points."
By withdrawing the most offensive articles in his November 22 constitutional declaration, Mr Morsi still exposes the 236-article document to the court's judgment.
The courts hold the reins of the unfolding crisis. If Egypt's SCC convenes and decides to block the new constitution and its referendum, it could send Egypt reeling towards fresh instability.
The presidential policy shift came hours after Mr Morsi's leading critics refused to attend a day-long reconciliation meeting that the President had called for Saturday. Instead, only Mr Morsi's like-minded Islamist colleagues and one pro-democracy activist attended the meeting at the besieged presidential palace.
The timing of Mr Morsi's decision could also reveal some pressure from Egypt's military, which tentatively waded into the conflict for the first time on Saturday.
In a televised statement in the afternoon, an unnamed military official admonished Mr Morsi's opponents for ignoring the President's calls for dialogue and made ominous references to the military's "responsibility for maintaining the supreme interests of the nation".
"Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens," the spokesman said.
"Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow."
Egypt's military, which for two years had been a constant presence in the country's political scene, has been largely absent from the two-week conflict.
Its creeping re-entry to the political field comes a day after Mr Morsi showed signs of ceding to some of his opponents' demands.
Original piece is http://www.theaustralian.com.au/business/wall-street-journal/mohammed-morsi-throws-crumb-to-critics-with-partial-withdrawal-of-decree/story-fnay3ubk-1226533199534