Exclusive: Egyptian investor seeks to put stamp on Telecom Italia

DUBAI (Reuters) – Egyptian entrepreneur Naguib Sawiris aims to shake up debt-laden Telecom Italia and steer it towards expansion in Brazil if shareholders warm up to his proposal for a 3 billion euro ($ 3.9 billion) cash infusion.

The billionaire tycoon, who got to know Italy well when he owned the third-biggest mobile operator Wind, has put on the table a capital increase that could make him one of the biggest shareholders in Telecom Italia.

Details on the structure of the proposed transaction are scarce, but Sawiris told Reuters that he proposed that the capital increase be open to all shareholders, not just himself, and that it should be conducted around the current market price of 0.70 euros per share.

That is likely to draw the ire of other Telecom Italia shareholders, including Spain’s Telefonica and the three Italian financial institutions who together own 22.4 percent via an unlisted holding company called Telco.

They value Telecom Italia at 1.50 euros per share in their accounts, and Marco Fossati, whose family’s Findim Group SA owns 5 percent of the Italian operator, on Monday said 1.50 was the “correct price” for any capital increase.

Sawiris, going against a trend of retreating investment in crisis-hit southern Europe, said he might also bring in some of his old Wind associates to put Telecom Italia back on the path to growth.

“This proposal will provide a more stable financial structure for Telecom Italia going forward, more growth in Latin America and Brazil, and improved management through the infusion of people who have an excellent knowledge of the Italian market,” Sawiris told Reuters.

Sawiris initially approached Telefonica and the other shareholders in Telco about the possibility of carrying out a capital increase at the holding company level. He was rebuffed, so decided to approach the Italian group directly.

“We are willing to participate in the capital increase, but shareholders have the choice not to get diluted and join in putting the money,” he said.

“If they do not want to, we will come and replace them. But they will benefit from a higher stock price and a more stable company and a company that will grow.”

It remains to be seen whether his vision for the group will be shared by Telecom Italia’s management and core shareholders.

Telefonica, insurer Assicurazioni Generali, and banks Mediobanca and Intesa Sanpaolo had the Sawiris’ offer dropped onto them as a bombshell two weeks ago, insiders have said.

“Sawiris is not a man to go in without being sure he can drive the strategy,” one source familiar with the thinking of the core shareholders said.

Sawiris told Reuters he was also opposed to a current plan to spin off Telecom Italia’s fixed-line network, which is backed by some core investors as a way to raise badly needed cash, and by the Italian government as a means to speed up broadband investment.

“I believe this is a catastrophe,” Sawiris said. “If Telecom Italia does that, they will lose the only differentiator they have left in the telecom market in Italy.”

Telecom Italia is now in talks with an Italian state-backed investment fund over such a spin-off. Under the plan, the fund would take a minority stake in the new company in exchange for Telecom Italia effectively becoming a wholesaler of broadband capacity to other companies.

Proponents of the spin-off argue the move would help Telecom Italia reduce debt while accelerating the modernization of the woeful Internet infrastructure in Europe’s fourth-largest economy.

STRATEGY CROSSROAD

Telecom Italia’s board will meet on December 6 to discuss the network spin-off and whether to bid for Vivendi’s GVT, a broadband specialist in Brazil, to complement its TIM Brasil mobile business unit in the fast-growing market.

GVT’s owner, Vivendi, is seeking up to 7 billion euros for GVT, which provides fixed telephone, broadband, and TV services in 120 Brazilian cities. Preliminary bids are due in December, sources have told Reuters.

Sawiris is waiting in the wings, though he says he has not had any direct contact from Telecom Italia since sending a letter of interest two weeks ago.

However, advisers from both sides – Lazard for Sawiris and Rothschild for Telecom Italia – have been communicating, according to people familiar with the matter.

Meanwhile, sources close to the telecom group’s shareholders have complained of a lack of detail in the Sawiris proposal.

Nuno Matias, a telecoms analyst at Espirito Santo bank, said while Sawiris’s arguments about seeking growth in Brazil via the GVT takeover were persuasive, the tycoon could face an uphill battle getting the board and shareholders onside.

“Sawiris isn’t alone; there are controlling shareholders of Telecom Italia, and they have their own interests,” he said.

“If Telecom Italia strengthens in Brazil then it sets up a conflict with Telefonica.”

Sawiris pointed out that he tried talking to Telefonica.

“I met with them, but my feeling is that they are conflicted. They are happy where they are today holding Telecom Italia as a hostage and preventing it from growing into Latin America.”

Telefonica and Telecom Italia are the number one and number two players in Brazilian mobile, respectively, and also compete in Argentina. The conflict means that Telefonica cannot take part in board deliberations at Telecom Italia over the Latin American units.

Telefonica’s Chief Financial Officer Angel Vila said last week that the group wanted to remain a long-term shareholder in Telecom Italia, and opposed a capital increase.

Telecom Italia has made debt-cutting a priority since late 2008. Cost cuts and asset sales have trimmed net debt more than 4 billion euros to 29.5 billion at the end of September.

Morgan Stanley predicted its net debt was likely to stand at 27.8 billion euros at year-end, or 2.7 times earnings before interest, tax, depreciation and amortization (EBITDA), above sector averages and in the warning zone for rating agencies.

Sawiris, who sold Wind to Vimpelcom last year, wants to re-enter Italy by investing in the incumbent operator, betting on low valuations and turnaround potential in old-world telecoms.

“I’ve worked in Italy for five years and what I’ve learned that very few investors have the insight on what is the real story in Italy,” Sawiris said.

($ 1 = 0.7713 euros)

(Additional reporting by Leila Abboud in Paris and Lisa Jucca in Milan; Editing by Will Waterman)

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Man accused of stealing Tim Allen’s Chevy Impala

DENVER (AP) — A man suspected of stealing one of Tim Allen‘s custom cars says the comedian left the keys so he could drive it to Denver.

Denver police spokesman Sonny Jackson said Monday that 34-year-old Faustino Ibarra is being held without bond while awaiting extradition to California after his arrest on Saturday.

In a jailhouse interview with KDVR-TV (http://bit.ly/TpJirK ), Ibarra claimed Allen adopted him years ago. Jackson said there is no evidence of any adoption.

Ibarra said Allen had left the door to his garage open along with the keys.

Police confirmed that the customized 1996 Chevrolet Impala SS belonged to the “Home Improvement” star but said it hadn’t yet been reported stolen when it turned up in Denver.

Allen’s publicist Marleah (mar-LEE-uh) Leslie said she wouldn’t comment because it’s a police matter.

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Nobel winner and organ transplant pioneer Joseph Murray dies at 93

(Reuters) – Dr. Joseph Murray, the surgeon who carried out the first successful kidney transplant and later won a Nobel Prize for his work in medicine and physiology, died on Monday in Boston at the age of 93.

Murray died after suffering a stroke last Thursday, Brigham and Women’s Hospital spokesman Tom Langford said.

Murray and his team completed the first human organ transplant in 1954, taking a kidney from one identical twin and giving it to his twin brother, opening a new field in medicine, the hospital said.

“The world is a better place because of all Dr. Murray has given. His legacy will forever endure in our hearts and in every patient who has received the gift of life through transplantation,” hospital president Dr. Elizabeth Nabel said in a statement.

Later in his career, Murray continued to search for ways of suppressing a patient’s immune response to prevent it from rejecting foreign tissue, eventually becoming a co-winner of the Nobel Prize for Physiology or Medicine in 1990.

“Difficulties are opportunities. This is a quote that sits atop my father’s desk at home. It reflects the unwavering optimism of a great man who was generous, curious, and always humble,” his son Rick said in a statement.

Murray began a career in medicine on graduating from Harvard Medical School in the 1940s, and developed an interest in transplanting tissue while working with service personnel injured in World War Two, according to the Britannica Online Encyclopedia.

He completed his surgical training at the Brigham and Women’s Hospital and later returned to join the staff and serve as chief of plastic surgery.

With broad interests beyond medicine, Murray said in a brief autobiography for the Nobel Prize organization that he and his extended family had been “blessed in our lives beyond my wildest dreams.”

“My only wish would be to have 10 more lives to live on this planet. If that were possible, I’d spend one lifetime each in embryology, genetics, physics, astronomy and geology,” he said.

“The other lifetimes would be as a pianist, backwoodsman, tennis player, or writer for the National Geographic.”

More than 600,000 people worldwide have received transplants since Murray’s innovation, the hospital said.

(Additional reporting by Tim Gaynor; Editing by Lisa Shumaker)

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New York, New Jersey put $71 billion price tag on Sandy

(Reuters) - New York state and New Jersey need at least $71.3 billion to recover from the devastation wrought by Superstorm Sandy and prevent similar damage from future storms, according to their latest estimates.

The total, which could grow, came as New York Governor Andrew Cuomo said on Monday the state will need $41.9 billion, including $32.8 billion to repair and restore damaged housing, parks and infrastructure and to cover lost revenue and other expenses. The figure also includes $9.1 billion to mitigate potential damage from future severe weather events, Cuomo said.

Neighboring New Jersey, which saw massive damage to its transit system and coastline, suffered at least $29.4 billion in overall losses, according to a preliminary analysis released by Governor Chris Christie's office Friday. The preliminary cost estimate includes federal aid New Jersey has received so far.

By some measures, Sandy was worse than Hurricanes Katrina and Rita, which tore into the U.S. Gulf Coast in 2005, Cuomo said.

Sandy destroyed 305,000 houses in New York state - a still provisional number that's likely to grow - compared to the 214,700 destroyed in Louisiana by Katrina and Rita.

Sandy also caused nearly 2.2 million power outages at its peak in the state, compared to 800,000 from Katrina and Rita in Louisiana, and impacted 265,300 businesses compared to 18,700, Cuomo said.

While Sandy may have damaged more homes and businesses, Katrina took a far greater toll on human lives, killing more than 1,800 people directly or indirectly. Sandy, by comparison, is believed to have killed at least 121 people.

"Hurricane Katrina got a lot of notoriety for the way government handled -- or mishandled, depending on your point of view -- the situation," Cuomo said at a press conference.

But considering the dense population of the area Sandy impacted and costs to the economy, housing, and businesses, the damage done "was much larger in Hurricane Sandy than in Hurricane Katrina, and that puts this entire conversation, I believe, in focus," Cuomo said.

Sandy made landfall in New Jersey on October 29. It blasted through the Northeastern U.S., devastating homes, forcing evacuations, crippling power systems and shutting down New York City's subway system for days.

TAKING SANDY COSTS TO CONGRESS

The total cost to the region is still not known as estimates of the damage, as well as future repair and prevention costs, continue to come in from states, cities and counties.

New York City Mayor Michael Bloomberg said on Monday he will ask Congress for $9.8 billion to pay for Sandy costs not covered by insurance or other federal funds.

In a letter to New York's congressional delegation, Bloomberg said public, private and indirect losses to the city from the devastating late-October storm stood at $19 billion.

Of that, private insurance is expected to cover $3.8 billion, with Federal Emergency Management Agency reimbursements to cover at least an additional $5.4 billion, Bloomberg said in a statement.

The city still will need the additional $9.8 billion to help pay for costs that FEMA does not cover, like hazard mitigation, long-term housing, shoreline restoration and protection efforts, he said.

Whatever the final tally, officials are beginning to pressure Congress for federal assistance.

Cuomo met on Monday with the state's Congressional delegation and county officials. U.S. Senator Kirsten Gillibrand said in a statement that New York's Congressional delegation will push hard for additional federal funding.

"The federal government has a clear responsibility to commit all of the necessary resources to help us rebuild," she said.

Getting federal funds could be a tough fight, because of pressure on lawmakers to cut spending and raise taxes in order to shrink the federal deficit.

"This will be an effort that lasts not weeks, but many months, and we will not rest until the federal response meets New York's deep and extensive needs," said U.S. Senator Charles Schumer in a statement.

NUMBERS GAME

Cuomo's earlier estimates had pegged the total amount of damages for the region at $50 billion, with about $33 billion of that incurred in New York state.

In New York City, Bloomberg said on Monday that the city had about $4.8 billion of uninsured private losses, $3.8 billion of insured private losses, and $4.5 billion in losses to city agencies.

Reconstructing the city's damaged roads alone could cost nearly $800 million, Bloomberg said. New York City, a financial and tourism center, also lost about $5.7 billion in gross city product, he said.

Included in Cuomo's nearly $9.1 billion of mitigation costs are what he called "common sense" actions, like flood protection for the World Trade center site, roads, subway tunnels and sewage treatment plants, as well as power generators for the region's fuel supply system and backup power for health care facilities.

"We will see new projects," said Mysore Nagaraja, former president of the Metropolitan Transportation Authority's Capital Construction Co.

"In order to justify whatever money they finally end up getting, they have to come up with this list of projects that need to be done so that the future Sandy will not have the impact it had this time," he said.

Nagaraja is currently chairman of Spartan Solutions LLC, an infrastructure consulting firm.

(Reporting by Hilary Russ; Additional reporting by Daniel Trotta; Editing by Maureen Bavdek, Bill Trott and Phil Berlowitz)

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After His Vulgar Assault on Jenny Johnson, Chris Brown Quits Twitter

Chris Brown is really bad at public relations. The 23-year-old rapper went on a memorably vulgar tirade against comedian Jenny Johnson on Sunday and apparently realized soon thereafter that it was a bad idea, because he scrambled to cover his tracks. But deleting tweets does not erase their previous existence and deactivating your Twitter account does not take away all of the bad things you did with it.

RELATED: The New York Times’s Bill Keller Riles Up Twitter

We’re getting ahead of ourselves, though. Did you hear about Chris Brown’s memorably vulgar tirade against comedian Jenny Johnson on Sunday? It was truly despicable. Johnson, if you haven’t heard of her, is pretty big on Twitter and pretty funny, too. She’s also deeply disapproving of Brown’s existence, more specifically his history of beating women. And she didn’t miss a chance to take a swipe at Brown on Sunday, when he complained about his appearance. “I look old as fuck! I’m only 23…” Brown tweeted. “ ”I know! Being a worthless piece of shit can really age a person.” Johnson replied.

RELATED: The Twitter Skirmish While You Were Sleeping Over #RomneyStrength

Then things got ugly. In a series of tweets, Brown told Johnson to suck his dick, threatened to fart on her, threatened to shit and called her a “ho” about seven times. After tweeting — and this is a direct quote — “mom says hello… She told me not to shart in ur mouth, wanted me to shit right on the retina, ….#pinkeye” Brown tweeted, “Just ask Rihanna if she mad??????” You can read the entire exchange here.

RELATED: Morning Twitter Meme: Journalists Tiring of Royal Wedding

Brown’s rant was not well received by the Twitter community or the media. Then again, at this point, it’s not like anybody expected more from Brown. This is the same guy that dressed up like a terrorist for Halloween. It’s unclear how or why, but within a couple hours of the blowback, Brown’s Twitter account was gone. We’ll let you know if we find out any more details. For now, we’re going with Eli Braden’s theory: “Chris Brown’s publicist finally figured out his Twitter password.”

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Israel successfully tests missile defense system

JERUSALEM (AP) — Israel successfully tested its newest missile defense system Sunday, the military said, a step toward making the third leg of what Israel calls its “multilayer missile defense” operational.

The “David’s Sling” system is designed to stop mid-range missiles. It successfully passed its test, shooting down its first missile in a drill Sunday in southern Israel, the military said.

The system is designed to intercept projectiles with ranges of up to 300 kilometers (180 miles).

Israel has also deployed Arrow systems for longer-range threats from Iran. The Iron Dome protects against short-range rockets fired by militants in the Gaza Strip and Hezbollah guerrillas in Lebanon. Iron Dome shot down hundreds of rockets from Gaza in this month’s round of fighting.

Israeli Defense Minister Ehud Barak said the success of Iron Dome highlighted the “immense importance” of such systems.

“David’s Sling,” also known “Magic Wand,” is developed by Israel’s Rafael Advanced Defense Systems and U.S.-based Raytheon Co. and is primarily designed to counter the large arsenal of Hezbollah rockets in Lebanon.

The military said the program, which is on schedule for deployment in 2014, would “provide an additional layer of defense against ballistic missiles.”

The next generation of the Arrow, now in the development stage, is set to be deployed in 2016. Called the Arrow 3, it is designed to strike its target outside the atmosphere, intercepting missiles closer to their launch sites. Together, the two Arrow systems would provide two chances to strike down incoming missiles.

Israel also uses U.S.-made Patriot missile defense batteries against mid-range missiles, though these failed to hit any of the 39 Scud missiles fired at Israel from Iraq In the first Gulf War 20 years ago. Manufacturers say the Patriot system has been improved since then.

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Tourists visit Southfork to remember Larry Hagman

PARKER, Texas (AP) — Tourists and locals flocked to Southfork Ranch on Saturday, bringing flowers in memory of Larry Hagman, who played the infamous J.R. Ewing on the TV show “Dallas.”

Hagman died in Dallas on Friday at age 81 due to complications from his battle with cancer.

Southfork, a ranch north of Dallas, was known to millions of viewers as the Ewing family home. Exterior shots of the house and pool were shown when the series aired from 1978 to 1991, although the show wasn’t filmed there.

The ranch has been open for tours since the mid-1980s, and now sees more than 100,000 visitors each year. Each room of the house has a theme for each character.

On Saturday, J.R. Ewing’s room had flowers and a card for tourists to sign.

“Today is about Larry Hagman and his family,” said Janna Timm, a Southfork Ranch & Hotel spokeswoman. “He was such a wonderful person, and we will really miss him.”

“Dallas” was recently revived on TNT this summer, and all of the scenes were filmed at Southfork or other places in the Dallas area. Hagman had revised his role as the scheming oilman who would even double-cross his own son.

Linda Sproule of Peterborough, Ontario, had been traveling through the U.S. the past couple of weeks and heard about Hagman’s death Friday while in Dallas. She said she didn’t know where Southfork was but wanted to come because she was a fan of the show in the 1980s.

“I remember on Friday nights we watched it, and J.R. was bigger than life in some ways,” she said after taking the Southfork tour Saturday morning. “This ranch is beautiful. Being here is kind of emotional in a way.”

Barbara Quinones and her husband were in town for their daughter’s soccer tournament and had already planned to visit Southfork when they heard news of Hagman’s death.

“We loved him because he was so ruthless,” said Quinones, of Albuquerque, N.M. “This is a sad day, but I’m glad we’re here.”

Some of the show’s stars, including Hagman, came to Southfork for the series’ 25th anniversary. The Fort Worth-born actor also had visited several times before the show was revived.

“He was definitely a gentleman, a class act,” said Jim Gomes, vice president of resorts at Southfork Ranch & Hotel. “He loved the fans as much as they loved him.”

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Holiday shopping season off to record start

NEW YORK (AP) — If you make holiday shopping convenient, Americans will come in droves.

It's estimated that U.S. shoppers hit stores and websites at record numbers over the Thanksgiving weekend, according to a survey released by the National Retail Federation on Sunday. They were attracted by retailers' efforts to make shopping easier, including opening stores on Thanksgiving evening, updating mobile shopping applications for smartphones and tablets, and expanding shipping and layaway options.

All told, a record 247 million shoppers visited stores and websites over the four-day weekend starting on Thanksgiving, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for the trade group. Americans spent more too: The average holiday shopper spent $423 over the entire weekend, up from $398 last year. Total spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.

Caitlyn Maguire, 21, was one of the shoppers that took advantage of all the new conveniences of shopping this year. Maguire, who lives in New York, began buying on Thanksgiving night at Target's East Harlem store. During the two-hour wait in line, she also bought items on her iPhone on Amazon.com. On Friday, she picked up a few toys at Toys R Us. And on Saturday she was out at the stores again.

"I'm basically done," said Maguire, who spent about $400 over the weekend.

The results for the weekend appear to show that retailers' efforts to make shopping effortless for U.S. consumers during the holiday shopping season worked. Retailers upped the ante in order to give Americans more reasons to shop. Stores feared that consumers might not spend because of the weak job market and worries that tax increases and budget cuts will take effect if Congress fails to reach a budget deal by January.

Retailers, which can make up to 40 percent of their annual revenue in November and December, were hoping Thanksgiving openings and other incentives would help boost what's expected to be a difficult holiday shopping season. The National Retail Federation estimates that overall sales in November and December will rise 4.1 percent this year to $586.1 billion. That's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009, when sales were nearly flat.

Matthew Shay, president and CEO of the National Retail Federation, said retailers can be encouraged by the first weekend of the holiday shopping season.

"Retailers and consumers both won this weekend, especially on Thanksgiving," he said.

Here were the trends that emerged over the weekend:

— Online wave: According to comScore, which tracks online spending, online sales rose 26 percent to $1.04 billion on Black Friday compared with a year ago. On Thanksgiving, online sales rose 32 percent from last year to $633 million. And online sales on Black Friday were up 26 percent from the same day last year to $1.042 billion. It was the first time online sales on Black Friday surpassed $1 billion.

— Thanksgiving shopping: Many stores, including Toys R Us and Target, opened on Thanksgiving evening this year. No data is out yet about how much shoppers spent on that day, but it appears that consumers took advantage of the earlier start: According to the National Retail Federation's survey, the number of people who shopped on Thanksgiving rose 23.1 percent. That compares with a 3.1 percent increase for Black Friday.

Linda and James Michaels of Portland, Ore., were among those shopping on Thanksgiving. They hit up the big sales on the day and got everything they were hoping for that night.

They picked up remote control cars and some Mickey Mouse items on sale at Toys R Us. Then they went a few doors down to Target and scored the last Operation game on sale for $7. They were even able to pick up some pajamas and shoes along the way for the kids. In total they spent about $300.

"I felt lucky that I caught the deals and there was no craziness, no fighting," said Linda Michaels. "I was nervous."

ShopperTrak, which analyzes customer traffic at 40,000 U.S. stores, plans to release sales data for Thanksgiving later this week, but the firm is estimating that retailers generated $700 million in sales on the holiday.

— Black Friday flop: It appears that the Thanksgiving openings may have hurt sales on the day after.

Black Friday is still expected to be the biggest shopping day of the year, but sales on that day slipped to $11.2 billion, down 1.8 percent from last year, according to ShopperTrak. That's below ShopperTrak's estimate that Black Friday sales would rise 3.8 percent to $11.4 billion.

Karen MacDonald, a spokeswoman at Taubman Centers, which operates 28 malls across the country, said that Thanksgiving openings hurt business. Based on a sampling of 10 malls, sales growth was unchanged up to mid-single digits on Friday, and unchanged up to low single digit on Saturday.

"It was a different feeling," she said. "It was a good Black Friday, but I don't think it was great."

The disappointing sales on Black Friday may have been the result of shoppers like Miguel Garcia, a 40-year-old office coordinator.

"I can't deal with all that craziness," said Garcia, who was at a Target in the Bronx borough of New York City on Saturday. "Compared to what I saw on TV yesterday, this is so much more comfortable and relaxed. I can actually think straight and compare prices."

___

AP writers Rodrigue Ngowi in Watertown, Mass., Juan Carolos Llorca in El Paso, Texas, and Candice Choi in New York contributed to this report

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Egypt reformist warns of turmoil from Morsi decree

CAIRO (AP) — Prominent Egyptian democracy advocate Mohammed ElBaradei warned Saturday of increasing turmoil that could potentially lead to the military stepping in unless the Islamist president rescinds his new, near absolute powers, as the country’s long fragmented opposition sought to unite and rally new protests.

Egypt‘s liberal and secular forces — long divided, weakened and uncertain amid the rise of Islamist parties to power — are seeking to rally themselves in response to the decrees issued this week by President Mohammed Morsi. The president granted himself sweeping powers to “protect the revolution” and made himself immune to judicial oversight.

The judiciary, which was the main target of Morsi’s edicts, pushed back Saturday. The country’s highest body of judges, the Supreme Judical Council, called his decrees an “unprecedented assault.” Courts in the Mediterranean city of Alexandria announced a work suspension until the decrees are lifted.

Outside the high court building in Cairo, several hundred demonstrators rallied against Morsi, chanting, “Leave! Leave!” echoing the slogan used against former leader Hosni Mubarak in last year’s uprising that ousted him. Police fired tear gas to disperse a crowd of young men who were shooting flares outside the court.

The edicts issued Wednesday have galvanized anger brewing against Morsi and the Muslim Brotherhood, from which he hails, ever since he took office in June as Egypt’s first freely elected president. Critics accuse the Brotherhood — which has dominated elections the past year — and other Islamists of monopolizing power and doing little to bring real reform or address Egypt’s mounting economic and security woes.

Oppositon groups have called for new nationwide rallies Tuesday — and the Muslim Brotherhood has called for rallies supporting Morsi the same day, setting the stage for new violence.

Morsi supporters counter that the edicts were necessary to prevent the courts, which already dissolved the elected lower house of parliament, from further holding up moves to stability by disbanding the assembly writing the new constitution, as judges were considering doing. Like parliament was, the assembly is dominated by Islamists. Morsi accuses Mubarak loyalists in the judiciary of seeking to thwart the revolution’s goals and barred the judiciary from disbanding the constitutional assembly or parliament’s upper house.

In an interview with a handful of journalists, including The Associated Press, Nobel Peace laureate ElBaradei raised alarm over the impact of Morsi’s rulings, saying he had become “a new pharaoh.”

“There is a good deal of anger, chaos, confusion. Violence is spreading to many places and state authority is starting to erode slowly,” he said. “We hope that we can manage to do a smooth transition without plunging the country into a cycle of violence. But I don’t see this happening without Mr. Morsi rescinding all of this.”

Speaking of Egypt’s powerful military, ElBaradei said, “I am sure they are as worried as everyone else. You cannot exclude that the army will intervene to restore law and order” if the situation gets out of hand.

But anti-Morsi factions are chronically divided, with revolutionary youth activists, new liberal political parties that have struggled to build a public base and figures from the Mubarak era, all of whom distrust each other. The judiciary is also an uncomfortable cause for some to back, since it includes many Mubarak appointees who even Morsi opponents criticize as too tied to the old regime.

Opponents say the edicts gave Morsi near dictatorial powers, neutering the judiciary when he already holds both executive and legislative powers. One of his most controversial edicts gave him the right to take any steps to stop “threats to the revolution,” vague wording that activists say harkens back to Mubarak-era emergency laws.

Tens of thousands of people took to the streets in nationwide protests on Friday, sparking clashes between anti-and pro-Morsi crowds in several cities that left more than 200 people wounded.

On Saturday, new clashed broke out in the southern city of Assiut. Morsi opponents and members of the Muslim Brotherhood swung sticks and threw stones at each other outside the offices of the Brotherhood‘s political party, leaving at least seven injured.

ElBaradei and a six other prominent liberal leaders have announced the formation of a National Salvation Front aimed at rallying all non-Islamist groups together to force Morsi to rescind his edicts.

The National Salvation Front leadership includes several who ran against Morsi in this year’s presidential race — Hamdeen Sabahi, who finished a close third, former foreign minister Amr Moussa and moderate Islamist Abdel-Moneim Aboul-Fotouh. ElBaradei says the group is also pushing for the creation of a new constitutional assembly and a unity government.

ElBaradei said it would be a long process to persuade Morsi that he “cannot get away with murder.”

“There is no middle ground, no dialogue before he rescinds this declaration. There is no room for dialogue until then.”

The grouping seems to represent a newly assertive political foray by ElBaradei, the former chief of the U.N. nuclear watchdog agency. ElBaradei returned to Egypt in the year before Mubarak’s fall, speaking out against his rule, and was influential with many of the youth groups that launched the anti-Mubarak revolution.

But since Mubarak’s fall, he has been criticized by some as too Westernized, elite and Hamlet-ish, reluctant to fully assert himself as an opposition leader.

The Brotherhood‘s Freedom and Justice political party, once headed by Morsi, said Saturday in a statement that the president’s decision protects the revolution against former regime figures who have tried to erode elected institutions and were threatening to dissolve the constitutional assembly.

The Brotherhood warned in another statement that there were forces trying to overthrow the elected president in order to return to power. It said Morsi has a mandate to lead, having defeated one of Mubarak’s former prime ministers this summer in a closely contested election.

Morsi’s edicts also removed Abdel-Meguid Mahmoud, the prosecutor general first appointed by Mubarak, who many Egyptians accused of not prosecuting former regime figures strongly enough.

Speaking to a gathering of judges cheering support for him at the high court building in Cairo, Mahmoud warned of a “vicious campaign” against state institutions. He also said judicial authorities are looking into the legality of the decision to remove him — setting up a Catch-22 of legitimacy, since under Morsi’s decree, the courts cannot overturn any of his decisions.

“I thank you for your support of judicial independence,” he told the judges.

“Morsi will have to reverse his decision to avoid the anger of the people,” said Ahmed Badrawy, a labor ministry employee protesting at the courthouse. “We do not want to have an Iranian system here,” he added, referring to fears that hardcore Islamists may try to turn Egypt into a theocracy.

Several hundred protesters remained in Cairo’s Tahrir Square Saturday, where a number of tents have been erected in a sit-in following nearly a week of clashes with riot police.

____

Brian Rohan contributed to this report from Cairo.

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