Egypt's ruling military council has accepted the resignation tendered by the cabinet yesterday, Al Jazeera satellite television said this evening, citing unnamed sources.
The cabinet had said earlier it had presented its resignation yesterday, following violent clashes in Cairo's Tahrir square between police and protesters.
However Egypt's military council is seeking agreement on a new prime minister before it accepts the resignation submitted by the cabinet of Prime Minister Essam Sharaf, a military source told Reuters today.
The source said no formal announcement would be made until the ruling military council had agreed on the candidate. He did not provide further details.
In a late-night statement, the ruling council urged calm and called for crisis talks with political forces to find a way forward. The council voiced its "deep regret for the victims in these painful incidents", state news agency MENA said.
"It called on all sections of the nation to show the greatest degree of self-restraint so that the matter does not lead to more victims and casualties," the agency added.
Earlier, Egypt's ruling generals issued a law barring anyone found guilty of corruption from political life, but protesters said it would not allay their concerns that former supporters of ousted president Hosni Mubarak may regain influence.
The announcement was made after three days of clashes between security forces and protesters demanding an end to army rule in which 33 people have been killed and 1,250 wounded.
"The amended law would apply to those who work to corrupt political life and damage the interests of the nation," the military council said in a statement.
Those convicted by the criminal court would be "removed from positions of leadership and would lose their membership in the People's Assembly (parliament) and local councils," it added.
They would also be barred from joining a political party for five years.
Members of Mubarak's now defunct National Democratic Party (NDP), some of whom now face trial for graft and abuse of power, often used their wealth and connections to secure seats in parliament, and to advance family and business interests.
Many former NDP members are standing in a parliamentary election that starts next Monday, but the new law is unlikely to stop them from entering the polls, protesters said.
Many political parties and pro-democracy activists have called for a ban on all former members of Mubarak's NDP, which functioned more as a patronage machine than a political party.
Protesters camped out in Cairo's Tahrir Square dismissed the announcement.
"This is a meaningless move by the military council. In fact this is a slap in the face of protesters and those who died to demand freedom and respect," said activist Mohamed Fahmy.
Jurist Hesham Bastawisy said the move was too late to stop former NDP members from running for parliament. "It will be a lengthy legal process of months to prove that so and so is guilty of political corruption in a criminal court," he said.
Army generals, who commanded popular support after Mubarak was unseated on February 11th, are increasingly seen by protesters as an obstacle to a transition to democracy and civilian rule.
"The council is out of step with the people," Mr Fahmy said.
Agencies