The Muslim Brotherhood in Egypt has called off a mass rally planned for tomorrow in support of President Mohamed Mursi, amid a crisis over the extent of his powers.

It said the decision was taken to prevent bloodshed because opposition parties are also planning demonstrations.

President Mursi issued a decree last week that put beyond judicial review any decision he takes until a new parliament is elected, drawing charges he had given himself the powers of a modern-day Pharaoh.

Opponents plan to go ahead with a big demonstration tomorrow to demand he scrap the decree, threatening more turmoil for a nation that has been stumbling towards democracy for almost two years since Hosni Mubarak was ousted as president.

However, the Muslim Brotherhood, which was behind Mr Mursi's election win in June, said it had called off a rival protest also planned for tomorrowin Cairo. Violence has flared when both sides turned out in the past.

Mr Mursi's opponents have accused him of behaving like a dictator and the West has voiced its concern, worried by more turbulence in a country that has a peace treaty with Israel and lies at the heart of the Arab Spring.

President Mursi held crisis talks with members of the Supreme Judicial Council, the nation's highest judicial body, to resolve the crisis over the decree that was seen as targeting in part a legal establishment still largely unreformed from Mubarak's era.

The council had proposed he limit the scope of decisions that would be immune from judicial review to "sovereign matters", language the presidential spokesman said Mr Mursi backed.

"The president said he had the utmost respect for the judicial authority and its members," spokesman Yasser Ali told reporters in announcing the agreement.

After reading out the statement outlining what was agreed with judges, Mr Ali told Reuers: "The statement I read is an indication that the issue is resolved."

Protesters have been camping out in Cairo's Tahrir Square since Friday to demand that the decree be scrapped said the president had not done enough to defuse the row.

Mr Mursi's administration has defended his decree as an effort to speed up reforms and complete a democratic transformation. Leftists, liberals, socialists and others say it has exposed the autocratic impulses of a man once jailed by Mubarak.