Egypt’s interim prime minister has said that the Muslim Brotherhood should not be banned or excluded from politics following the army's overthrow of Islamist President Mohamed Mursi.

The turn around in opinion has fuelled speculation that the military-installed government may now seek a political settlement to the on-going crisis in the country.

The statement also coincides with a new call for protests by Mr Mursi's supporters.

Hazem el-Beblawi, the interim prime minister, had proposed on 17 August that the Brotherhood, the Arab world's oldest and arguably most influential Islamist group, should be dissolved, and said the government was studying the idea.

In an interview with state media late on Tuesday, Mr Beblawi appeared to row back, saying the government would instead monitor the group and its political wing and that the actions of its members would determine its fate.

"Dissolving the party or the group is not the solution and it is wrong to make decisions in turbulent situations," Mr Beblawi is quoted as saying.

"It is better for us to monitor parties and groups in the framework of political action without dissolving them or having them act in secret."

But he tempered his comments in a separate interview with the newspaper al-Shorouk, saying parts of Egyptian society "think that the Brotherhood does not truly desire reconciliation", and urging it to "face up to reality".

The government has portrayed its attack on the Brotherhood as a fight against terrorism, and Mr Beblawi said ordinary citizens were "afraid of reconciliation with people who use force".

There has been no sign from the Brotherhood, most of whose leaders are now in jail or on the run, that it wants to engage with the army establishment that forced it out.

Founded in 1928, the Brotherhood was banned by Egypt's military rulers in 1954. Though still outlawed during the 30-year rule of Hosni Mubarak, it ran a large welfare network and its members ran as independents in limited elections.

After decades of operating in the shadows and winning support with its charities and preaching, the Brotherhood registered itself as a non-governmental organisation in March in response to a court challenge by people contesting its legality.

It also has a registered political arm, the Freedom and Justice Party (FJP), set up in 2011 after Mr Mubarak's overthrow in an uprising. The Brotherhood won all five national votes held since 2011, including Mr Mursi's election as president last year.

But Mr Mursi alienated swathes of Egyptians during his year in power and, after mass protests, the army removed him on 3 July.

More than 1,000 people, including about 100 police and soldiers, have since been killed in the worst internal violence in the Egyptian republic's history.

Most died when the security forces dispersed two pro-Mursi protest camps on 14 August. State media have described the crackdown as a war on "terrorism".

The government said it will call parliamentary and presidential elections within months, after the passage of a new constitution.