Mass protest as Michigan curbs union rights

CHICAGO: Thousands of protesters descended on Michigan's state capitol Tuesday as lawmakers prepared to pass union-curbing "right-to-work" legislation in a state seen as the heart of the labor movement.

The measure would weaken unions by allowing workers who get the same wages and benefits as union members to decline to pay any union dues.

Democratic lawmakers begged their Republican colleagues not to pass the controversial bill, which they warned would unleash deep social and political strife.

"There will be blood. There will be repercussions," state representative Douglass Geiss told the chamber.

Geiss reminded his colleagues of the violent clashes that accompanied the struggle to form unions in the 1930s and warned that people feel just as strongly about solidarity today.

"If ten people walk in and say I'm not going to pay dues anymore, there's going to be fights," he warned.

State representative John Switlaski lashed out at the fact Republicans were pushing the bill through in a lame duck session using a parliamentary maneuver that limits debate and means Democrats can't stop it unless they regain control in the 2014 election.

"The next two years are going to be terrible. They're going to be ugly," Switlaski said.

"I think we should pause and take a step back... let the people have a say. we'll vote for it. Put it on the ballot."

Republican state representative Lisa Lyons insisted the law was about giving workers their constitutionally guaranteed right to freedom of association.

"We are witnessing history in the making," she said. "This is the day that Michigan freed its workers."

Boos and chants of "veto" poured into the chamber from the gallery after the House voted 58-51 to pass the bill, sending it to Governor Rick Snyder for final approval.

Hundreds of union members and supporters crowded into the capitol dome, blowing whistles and chanting "the people are united" and "What's disgusting? Union busting!"

Thousands more shivered in the cold outside, television news footage showed.

"The right-wing forces in Michigan are trying to take power away from working families," United Auto Workers union chief Bob King told reporters.

"They want working families to have less income, less security. This is about partisanship, not bringing the state together."

Currently, the state operates a "closed shop" policy that requires workers who profit from collective bargaining to pay fees but does not make it mandatory for them to become union members.

The right-to-work law creates an incentive for people not to join the union in what is known as the "free rider" problem because it allows them to benefit from collective bargaining without paying for it.

Snyder insists the law is necessary "to maintain our competitive edge" and attract new jobs, especially after neighboring Indiana became the 23rd US state to enact right-to-work legislation earlier this year.

But while business may profit from weakening unions, the real motivation for lawmakers is political, said Roland Zullo, a labor relations expert at the University of Michigan.

"This whole right-to-work thing is retribution," Zullo told AFP. "It's really about the fact that unions in Michigan were very important actors in helping to elect Democrats this last election."

Unions are a key source of financial and grassroots get-out-the-vote support for President Barack Obama's Democrats, and he was quick to slam the controversial bill in an appearance at Michigan auto plant Monday.

"You know, these so-called right-to-work laws -- they don't have to do with economics: they have everything to do with politics," Obama told a cheering crowd of unionized workers.

"What they're really talking about is giving you the right to work for less money."

-AFP/ac

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Dharna planned at Jantar Mantar against cash transfer plan

NEW DELHI: Over 1,000 people from 12 states are set to converge at Jantar Mantar in the Capital on Thursday to protest against the UID-driven cash transfer program and demand a more inclusive National Food Security Bill. The protest is being organised by The Right To Food Campaign, a grassroots organisations' network.

The Right To Food Campaign has earlier criticized the categorization of beneficiaries under the Public Distribution System and the resultant exclusion of several sections of the BPL population.

Those at the receiving end of the failed experiment of cash transfer for kerosene in Kotkasim, Rajasthan will also be present at the sit-in, which will also include cultural performances and debates.

"The dharna will make hunger visible. It will bring together people who are unfairly excluded from government food security programmes such as the PDS and pensions. Testimonies of such people will be put forward," said Kavita Srivastava of the Right To Food Campaign in a press release.

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Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

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Video of Columbus Circle Killer Released

The hunt for New York's Columbus Circle killer took on a new impetus today as police released surveillance video showing the killer moments before he calmly walked up to Brandon Lincoln Woodard and put one bullet from a silver colored handgun into the back of the Los Angeles man's head in full view of holiday shoppers.

The video confirms the details of the hit man's calculated wait for his victim as first reported on ABCNews.com on Monday.

"In the video, the gunman wanted in the shooting death yesterday of Brandon Lincoln Woodard, 31, of Los Angeles, is seen 10 minutes before the shooting," Deputy Commissioner for Public Information Paul Browne said in a statement today.

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Woodard, who is described by police as linked to the hip hop part of the Los Angeles entertainment industry, was strolling down 58th Street near the southern end of Central Park when he was gunned down.

"The shooter, who appears to be bald and may have a beard, exited a late model Lincoln sedan, initially bare-headed, but soon pulled the hood of his jacket over his head. Ten minutes later, at approximately 2 p.m., the shooter walked up behind Woodard and fired," Browne said.

In a grainy still image also released, the gunman is seen behind Woodard a moment before the shooting, pulling the weapon from his jacket.

Just before he was shot, Woodard turned "instinctively almost," then turned back to his portable electronic device, police told ABC News.

Sources tell ABC News that Woodard was arrested in 2009 in connection with a robbery in California.

Woodard was raised in Los Angeles' Ladera Heights neighborhood and attended the private Campbell Hall High School, they said. He attended college and law school at Loyola Marymount College in Los Angeles, law enforcement sources and friends said.

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Egypt army given temporary power to arrest civilians

CAIRO (Reuters) - Egypt's Islamist president has given the army temporary power to arrest civilians during a constitutional referendum he is determined to push through despite the risk of bloodshed between his supporters and opponents accusing him of a power grab.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and their critics besieging Mohamed Mursi's graffiti-daubed presidential palace. Both sides plan mass rallies on Tuesday.

The elite Republican Guard has yet to use force to keep protesters away from the palace, which it ringed with tanks, barbed wire and concrete barricades after last week's violence.

Mursi, bruised by calls for his downfall, has rescinded a November 22 decree giving him wide powers but is going ahead with a referendum on Saturday on a constitution seen by his supporters as a triumph for democracy and by many liberals as a betrayal.

A decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians and refer them to prosecutors until the announcement of the results of the referendum, which the protesters want cancelled.

Despite its limited nature, the edict will revive memories of Hosni Mubarak's emergency law, also introduced as a temporary expedient, under which military or state security courts tried thousands of political dissidents and Islamist militants.

But a military source stressed that the measure introduced by a civilian government would have a short shelf-life.

"The latest law giving the armed forces the right to arrest anyone involved in illegal actions such as burning buildings or damaging public sites is to ensure security during the referendum only," the military source said.

Presidential spokesman Yasser Ali said the committee overseeing the vote had requested the army's assistance.

"The armed forces will work within a legal framework to secure the referendum and will return (to barracks) as soon as the referendum is over," Ali said.

Protests and violence have racked Egypt since Mursi decreed himself extraordinary powers he said were needed to speed up a troubled transition since Mubarak's fall 22 months ago.

The Muslim Brotherhood has voiced anger at the Interior Ministry's failure to prevent protesters setting fire to its headquarters in Cairo and 28 of its offices elsewhere.

Critics say the draft law puts Egypt in a religious straitjacket. Whatever the outcome of the referendum, the crisis has polarized the country and presages more instability at a time when Mursi is trying to steady a fragile economy.

On Monday, he suspended planned tax increases only hours after the measures had been formally decreed, casting doubts on the government's ability to push through tough economic reforms that form part of a proposed $4.8 billion IMF loan agreement.

"VIOLENT CONFRONTATION"

Rejecting the referendum plan, opposition groups have called for mass protests on Tuesday, saying Mursi's eagerness to push the constitution through could lead to "violent confrontation".

Islamists have urged their followers to turn out "in millions" the same day in a show of support for the president and for a referendum they feel sure of winning with their loyal base and perhaps with the votes of Egyptians weary of turmoil.

The opposition National Salvation Front, led by liberals such as Mohamed ElBaradei and Amr Moussa, as well as leftist firebrand Hamdeen Sabahy, has yet to call directly for a boycott of the referendum or to urge their supporters to vote "no".

Instead it is contesting the legitimacy of the vote and of the whole process by which the constitution was drafted in an Islamist-led assembly from which their representatives withdrew.

The opposition says the document fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill-equipped to deal with a looming economic crisis.

"Inevitability of referendum deepens divisions," was the headline in Al-Gomhuriya newspaper on Monday. Al Ahram daily wrote: "Political forces split over referendum and new decree."

Mursi issued another decree on Saturday to supersede his November 22 measure putting his own decisions beyond legal challenge until a new constitution and parliament are in place.

While he gave up extra powers as a sop to his opponents, the decisions already taken under them, such as the dismissal of a prosecutor-general appointed by Mubarak, remain intact.

"UNWELCOME" CHOICE

Lamia Kamel, a spokeswoman for former Arab League chief Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a "no" vote.

"Both paths are unwelcome because they really don't want the referendum at all," she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

A spokeswoman for ElBaradei, former head of the U.N. nuclear watchdog, said: "We do not acknowledge the referendum. The aim is to change the decision and postpone it."

Mahmoud Ghozlan, the Muslim Brotherhood's spokesman, said the opposition could stage protests, but should keep the peace.

"They are free to boycott, participate or say no, they can do what they want. The important thing is that it remains in a peaceful context to preserve the country's safety and security."

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a "dark tunnel".

A military source said the declaration read on state media did not herald a move by the army to retake control of Egypt, which it relinquished in June after managing the transition from Mubarak's 30 years of military-backed one-man rule.

The draft constitution sets up a national defense council, in which generals will form a majority, and gives civilians some scrutiny over the army - although not enough for critics.

In August Mursi stripped the generals of sweeping powers they had grabbed when he was elected two months earlier, but has since repeatedly paid tribute to the military in public.

So far the army and police have taken a relatively passive role in the protests roiling the most populous Arab nation.

(Additional reporting by Edmund Blair and Yasmine Saleh; editing by Philippa Fletcher)

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Football: Police hunt for Ferdinand coin throw culprit

LONDON: Police said on Monday that they were working to track down the person responsible for throwing a coin at Manchester United's Rio Ferdinand during Sunday's Manchester derby.

Ferdinand was left with blood streaming down his face from a cut above his eye after being struck by a coin as he celebrated Robin van Persie's injury-time winner in United's 3-2 victory at Manchester City.

Greater Manchester Police said that they had made 13 arrests and charged nine people over offences that occurred before, during and after the match.

"To have just 13 arrests for a crowd of this size and a match of this proportion is a testament to the policing operation we put in place," said Chief Inspector Steve Howard.

"Despite fierce rivalry and high tension, there was no major disorder. However, we will continue to investigate the coin-throwing incident and are determined to work with the club to bring the perpetrator to justice."

The Football Association (FA) are also investigating the incident.

Among the people charged were two men accused of entering the field of play during the game.

City goalkeeper Joe Hart had to restrain one fan from getting at Ferdinand after the coin-throwing incident, prompting the United defender to thank his one-time England colleague on Twitter.

The supporter, 21-year-old landscape gardener Matthew Stott, expressed regret for his behaviour on Monday.

"I would like to apologise to all those affected by my actions yesterday (Sunday), particularly Mr Ferdinand and the other players," he said in a statement released by his lawyers.

"I am extremely ashamed of my actions. I have let myself down, my family down, my fellow fans down and Manchester City Football Club."

Despite his apology, City cancelled Stott's season ticket for the rest of the season and said he would be given a lifetime ban from the club if found guilty of pitch encroachment.

"His season card has been immediately removed for the rest of the season and he has been charged to appear at court. If he is found guilty, he faces a lifetime ban," said a City spokesman.

A 30-year-old man has also been charged with what police said was a "racially aggravated public order" offence.

All the people charged are due to appear before magistrates in Manchester on January 4 next year.

FA chairman David Bernstein said the crowd trouble that marred the game was "deplorable" and called for strict punishments to be meted out to those responsible.

"It is deplorable to see those incidents and to see Rio Ferdinand with blood on his face is absolutely terrible," he told Sky Sports News.

"I think it's disturbing that we're seeing a recurrence of these types of incidents. We've had racial abuse issues, the odd pitch incursion, things being thrown at players -- it's very unacceptable and has to be dealt with severely."

He added: "I believe that if necessary these people need to go to the court and be banned for life, if they're found out."

Meanwhile, Professional Footballers' Association (PFA) chief executive Gordon Taylor said there was a case to be made for erecting nets to protect players from missiles thrown by supporters.

"I think you've got to give consideration to possibly, as has been suggested, some netting in vulnerable areas, be it behind the goals and round the corner flags," he told BBC Radio 5 Live.

United's victory took them six points clear of defending champions City at the top of the Premier League table.

-AFP/ac

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No idea why Hazare changed stand, Kejriwal says

MUMBAI: After Anna Hazare said he would not vote for the newly-launched Aam Aadmi Party, its leader Arvind Kejriwal was today at a loss to explain what had made the anti-corruption crusader change his mind.

"Earlier, he had supported our party. But I don't know what happened in two days. He did not remain with us. If we have erred, we are ready to rectify our mistakes," Kejriwal said.

He was talking to reporters after addressing a farmers' rally with independent MP Raju Shetty in Sangli district of western Maharashtra.

"Anna is our moral strength. He would always exert pressure for our good work. I hope he comes with us in future," Kejriwal said.

Kejriwal said AAP has pledged to work for fair pricing of farm products of farmers and "we are deeply concerned over the violent response to farmers' protests".

Over 15,000 farmers joined their rally on foot and vehicles. Kejriwal and Shetty paid their tributes to the families of two farmers Kundalik Kokate and Chandrakant Nalwade who were killed on November 12 during the protest demanding fair price for sugarcane.

Kejriwal said AAP would stand for their cause and fair pricing for farmers was a burning issue across the nation.

Farmers had collected Rs 17 lakh for the families of the deceased farmers, Shetty said. The amount was presented to the two families at the rally today.

Kejriwal paid tributes to the deceased farmers and said "they were martyrs of the second fight for independence".

He said it was shocking that the government was not even willing to pay even the cost of production to farmers and the only reason was that most of the sugar mills were owned by politicians and were "looting" the farmers.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Royal Hoax: DJs 'Shattered' After Nurse's Suicide

The two Australian radio DJs who prank-called the London hospital where Kate Middleton was being treated last week said they were "shattered" and "gutted" after the nurse who answered their call apparently killed herself.

Shock jocks Mel Greig, 30, and Michael Christian, 25, cried as they spoke to Australia's Channel 9 overnight in their first public interview since Jacintha Saldanha, 46, the nurse who last week connected the pair to the duchess' room, was found dead Friday morning.

"I'm shattered, gutted, heartbroken," Christian said. "Mel and myself are incredibly sorry for the situation and what's happened. I had the idea. … It was just a simple harmless phone call. It was going to go on for 30 seconds. We were going to get hung up on."

FULL COVERAGE: Royal Baby

The host of the "2Day" FM radio show pretended to be Queen Elizabeth and Prince Charles, asking for an update on Middleton's condition when they called up King Edward VII Hospital in central London. With no receptionist on duty overnight, Saldanha answered the prank call and put it through.

"It was just something that was fun and light-hearted and a tragic turn of events that I don't think anyone had expected," Christian said.

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Saldanha was found dead Friday morning after police were called to an address near the hospital to "reports of a woman found unconscious," according to a statement from Scotland Yard.

Investigators have not said how she might have killed herself.

Greig cried today when asked about the moment she heard of the death of Saldanha, a mother of two.

"It was the worst phone call I've ever had in my life," she said through tears. "There's not a minute that goes by that we don't think about her family and the thought that we may have played a part in that is gut-wrenching."

The DJs said they never expected to get through to Middleton's nurse and assumed "the same phone calls had been made 100 times that morning," Christian said.

Grieg said, "We wanted to be hung up on with our silly voices and wanted a 20-second segment to air of us doing stupid voice. … Not for a second did we expect to even speak to Kate or even have a conversation with anyone at the hospital. We wanted to be hung up on."

The global backlash against the duo has been fierce, from online death threats to calls for prison time. Their radio station has announced it is banning phony phone calls altogether, and suspending advertising indefinitely.

Max Moore-Wilton, the chairman of Southern Cross Austereo, said in a letter Sunday to Lord Glenarthur, chairman of King Edward VII's Hospital, that the company is reviewing the station's broadcast policies, the AP reported.

"I can assure you we are taking immediate action and reviewing the broadcast and processes involved," Moore-Wilton said in the letter. "As we have said in our own statements on the matter, the outcome was unforeseeable and very regrettable."

Greig and Michael have been taken off the air, silenced indefinitely.

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Egypt's opposition scorns Mursi's concession

CAIRO (Reuters) - A concession offered by President Mohamed Mursi failed to placate opponents who accused him on Sunday of plunging Egypt deeper into crisis by refusing to postpone a vote on a constitution shaped by Islamists.

Islamists say they see the referendum as sealing a democratic transition that began when a popular uprising toppled Hosni Mubarak 22 months ago after three decades of military-backed one-man rule.

Their liberal, leftist and Christian adversaries say the document being fast-tracked to a vote could threaten freedoms and fails to embrace the diversity of Egypt's 83 million people.

More protests were planned near Mursi's palace, despite tanks, barbed wire and other barriers installed last week after clashes between Islamists and their rivals killed seven people.

Mursi had given some ground the previous day when he retracted a fiercely contested decree giving himself extra powers and shielding his decisions from judicial review.

But the president insisted the constitutional referendum go ahead next Saturday and the Muslim Brotherhood, from which he sprang, urged the opposition to accept the poll's verdict.

Ahmed Said, a liberal leader of the main opposition National Salvation Front, described the race to a referendum as "shocking" and an "act of war" against Egyptians.

The Front has promised a formal response later on Sunday.

Egypt is torn between Islamists, who were suppressed for decades, and their rivals, who fear religious conservatives want to squeeze out other voices and restrict social freedoms. Many Egyptians just crave stability and economic recovery.

Brotherhood spokesman Mahmoud Ghozlan said the scrapping of Mursi's decree had removed any reason for controversy.

"We ask others to announce their acceptance of the referendum result," he said on the group's Facebook page, asking whether the opposition would accept "the basics of democracy".

The retraction of Mursi's November 22 decree, announced around midnight after a "national dialogue" boycotted by almost all the president's critics, has not bridged a deep political divide.

Prime Minister Hisham Kandil, a technocrat with Islamist leanings, said the referendum was the best test of opinion.

"The people are the makers of the future as long as they have the freedom to resort to the ballot box in a democratic, free and fair vote," he said in a cabinet statement.

"CONSTITUTION WITHOUT CONSENSUS"

But opposition factions, uncertain of their ability to vote down the constitution against the Islamists' organizational muscle, want the document redrafted before any vote.

"A constitution without consensus can't go to a referendum," said Hermes Fawzi, 28, a protester outside the palace. "It's not logical that just one part of society makes the constitution."

Egypt tipped into turmoil after Mursi grabbed powers to stop any court action aimed at hindering the transition. An assembly led by the Muslim Brotherhood and other Islamists then swiftly approved the constitution it had spent six months drafting.

Opponents, including minority Christians, had already quit the assembly in dismay, saying their voices were being ignored.

A leftist group led by defeated presidential candidate Hamdeen Sabahy demanded the referendum be deferred until a consensus could be reached on a new draft, saying there could be "no dialogue while blood is being spilled in the streets".

After the dialogue hosted by Mursi, a spokesman announced that the president had issued a new decree whose first article "cancels the constitutional declaration" of November 22. He said the referendum could not be delayed for legal reasons.

The decree ignited more than two weeks of sometimes bloody protests and counter-rallies in Egypt. Mursi's foes have chanted for his downfall. Islamists fear a plot to oust the most populous Arab nation's first freely elected leader.

The April 6 movement, prominent in the anti-Mubarak revolt, derided the result of Saturday's talks as "manipulation and a continuation of deception in the name of law and legitimacy".

Islamists reckon they can win the referendum and, once the new constitution is in place, a parliamentary poll about two months later. The Islamist-led lower house elected this year was dissolved after a few months by a court order.

Investors appeared relieved at Mursi's retraction of his decree, sending Egyptian stocks 4.4 percent higher on Sunday. Markets are awaiting approval of a $4.8 billion IMF loan later this month designed to support the budget and economic reforms.

The military, which led Egypt's transition for 16 turbulent months after Mubarak fell, told feuding factions on Saturday that only dialogue could avert "catastrophe". But a military source said these remarks did not herald an army takeover.

(Additional reporting by Edmund Blair and Yasmine Saleh; Editing by Stephen Powell)

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