European leaders issue warning to Egypt

Europe's leaders delivered a warning to the Egyptian authorities today to answer their people with "political reform, not repression".

As protests continued in central Cairo a statement agreed at a Brussels EU summit stopped short of calling on President Hosni Mubarak to step aside.

Instead it challenged the regime to honour the terms of a £150 million-a-year EU "Association Agreement", under which Egypt is committed to push through political and economic reforms in return for trade concessions and financial aid.

The EU statement came as Barack Obama's administration said it was in talks with Egyptian officials about the possibility of Mubarak resigning straight away, and the formation of an interim government before free and fair elections later this year.

Prime Minister David Cameron "played a significant role" in forging the summit declaration and was satisfied with the result, a Downing Street spokesman said.

Mr Cameron spoke several times in summit talks on the exact wording, as officials kept an eye on live television coverage of unfolding events in Cairo, where tens of thousands marched to bolster their campaign to oust the president.

The Prime Minister "toughened the text in several areas", said Downing Street, amid differences over how far to go in attacking the regime.

"There were always going to be differences of views in the Council (EU summit)," said a British diplomatic source.

The declaration emphasised the right to free and peaceful demonstration and said any attempt to restrict the free flow of information, including aggression and intimidation against journalists and "human rights defenders", was "unacceptable".

The text urged the Egyptian authorities "to meet the aspirations of the Egyptian people with political reform, not repression".

It said: "All parties should show restraint and avoid further violence and begin an orderly transition to a broad-based government.

"The European Council underlined that this transition process must start now."

The declaration also held out the offer of EU support for "the transition processes towards democratic governance, pluralism, improved opportunities for economic prosperity and social inclusion, and strengthened regional stability".

One summit official cautioned that events in Cairo were still in flux but said: "So far today the signals on the ground seem to be encouraging but there is some way to go and of course the EU is not the only body taking a position. What we've done is send a clear message about what our expectations are."

There was relief when the worst fears seemed not to be fulfilled, as tens of thousands marched through central Cairo to bolster their campaign to oust the president.

Many waved banners declaring "Now!" - a reference to their demand for President Mubarak to go immediately, and not linger for months as he insists he must to ensure a peaceful transition.

Families with children joined the trek to Tahrir Square, Cairo, despite fears about stone-wielding Mubarak supporters determined to respond to the continuing popular uprising against him.

The 82-year-old president insists he will serve out the remaining seven months of his term to ensure a stable process. "You don't understand the Egyptian culture and what would happen if I step down now," Mubarak said he told President Obama. He warned in an interview that chaos would ensue.

The EU's message will now be backed up by a visit to Egypt from EU foreign policy chief Baroness Ashton, mandated by Europe's foreign ministers to visit both Tunisia - where the regime has stepped aside after a similar public backlash - and Egypt.

Officials said it was not clear whether she would see President Mubarak. She was more likely to deal with new vice president Omar Suleiman.

Her brief, set out in the declaration, is to develop EU support measures for "transition and transformational processes" - strengthening democratic structures and government, and assisting in preparing for "free and fair" elections.