The Guardian reports: The Egyptian president, Mohamed Morsi, has scrapped a decree that had generated widespread unrest by awarding him near-absolute powers. But he insisted a referendum on a new constitution would go ahead as planned this week.

The announcement, which is unlikely to placate Morsi’s opponents, came after Egypt’s military warned that failure to resolve a crisis over the drafting of the constitution would result in “disastrous consequences” that could drag the country into a “dark tunnel”.

Selim al-Awa, an official who attended a “national dialogue meeting” called by Morsi at the presidential palace in Cairo but boycotted by his opponents, said the Islamist-dominated discussion recommended removing articles that granted the president powers to declare emergency laws and shield him from judicial oversight.

Earlier Egypt’s military had issued a statement saying: “Dialogue is the best and only way to reach consensus. The opposite of that will bring us to a dark tunnel that will result in catastrophe and that is something we will not allow.” Failing to reach a consensus was “in the interest of neither side. The nation as a whole will pay the price,” it added.

State radio and television interrupted programmes to read the military statement. A Muslim Brotherhood official welcomed the army’s “balanced” line. Former Arab League chief Amr Moussa, now an opposition leader, said that the army was reacting to an “enormously dangerous” crisis.

The statement came ahead of a new law to be issued by Morsi that will grant the armed forces the power to arrest civilians, alongside police forces, until a constitution is passed. The law makes the army responsible for the protection of state premises and maintaining security, and allows it the use of force if necessary to carry out these duties.