© Stringer/EPAEgyptian employees of service companies owned by the Suez Canal Authority have joined workers across the country in strike action.
Talks between the Egyptian government and opposition have all but collapsed after the regime balked at surrendering power to a transitional administration in the hope that mass protests would die down.

Instead, the unrest is spreading as some of the largest demonstrations yet against President Hosni Mubarak were joined by labour strikes across the country, including on the Suez canal, in the city of Alexandria and by public transport workers in Cairo.

A prominent member of a key opposition group, the Council of Wise Men, said negotiations had "essentially come to an end". A western diplomat said Washington was alarmed by the lack of progress and the vice-president Omar Suleiman's warning of a coup if the opposition refused to accept the government's terms.

© Paul Schemm/APProtesters outside the parliament building in Cairo hang a cartoon of President Hosni Mubarak. The Arabic reads: 'People need removal of the regime'
Diaa Rashwan, of the Council of Wise Men, said he offered Suleiman a compromise in which Mubarak would have remained president but with his powers transferred to a transitional government.

Rashwan said this proposal was rejected at the weekend and there had been no further movement. He said: "Suleiman's comments about there being a danger of a coup were shocking to all of us - it was a betrayal of the spirit of negotiations, and is unacceptable. The regime's strategy has been just to play for time and stall with negotiations. They don't really want to talk to anyone."

Instead, the largest demonstration so far took place in Cairo on Tuesday, the same day as 25 big demonstrations elsewhere in Egypt and the start of a series of strikes as trade unions joined the fray. Some stoppages are mainly about wage demands, but in the present crisis there is little doubt they are timed to support the pro-democracy movement. Tens of thousands of workers stayed away in Alexandria to demand Mubarak's resignation. Employees of the state-run Suez Canal company, public transport workers in Cairo and iron and steel workers in other areas have also joined the strikes.

At least two people were killed and several wounded in clashes between thousands of protesters and police in New Province, 300 miles from Cairo. This takes the estimated number of deaths at the hands of government forces above 300.

Rashwan said that the lack of progress in talks and the rise in protests had shifted the initiative back to the street.
© Anti-government protesters gather outside parliament gates 500 metres from Tahrir SquareAnti-government protesters gather outside parliament gates 500 metres from Tahrir Square

On Tuesday Suleiman told Egyptian newspaper editors that an escalation of the protests could unleash further repression. "We can't bear this for a long time," he said. "We don't want to deal with Egyptian society with police tools."

Suleiman warned of "the dark bats of the night emerging to terrorise the people" and said the alternative to negotiations on the government's terms was that "a coup happens". This would mean "uncalculated and hasty steps, including lots of irrationalities".

Suleiman defined a coup. "I mean a coup of the regime against itself, or a military coup or an absence of the system. Some force, whether it's the army or police or the intelligence agency or the [opposition Muslim] Brotherhood or the youth themselves could carry out 'creative chaos' to end the regime," he said.

Egypt's foreign minister, Ahmed Aboul Gheit, reiterated the threat on Wednesday by saying that the army could step in "to defend the constitution" if "adventurers" tried to take power.

Suleiman also said Egypt was not ready for democracy. "The culture of democracy is still far away," he said. Some opposition activists saw Suleiman's warning as confirmation that the government was in retreat and may be starting to panic.

Abdul-Rahman Samir, spokesman for the coalition of the main youth groups leading the protests, said a military takeover was a "disastrous scenario" that would not end the clamour for democracy.

"He is threatening to impose martial law, which means everybody in [Tahrir Square] will be smashed. But what would he do with the rest of the 70 million Egyptians who will follow us afterward?" he said. "We are striking and we will protest and we will not negotiate until Mubarak steps down. Whoever wants to threaten us, then let them do so."
© Patrick Baz/AFP/Getty ImagesAnti-government doctors read the papers at a makeshift clinic

A western diplomat said Washington was concerned about the Egyptian leadership's failure to deliver on promises of reform. On Tuesday the US vice-president, Joe Biden, phoned Suleiman to tell him immediate action must be taken towards political change, including the lifting of the 30-year state of emergency under which thousands of political prisoners have been detained.

The diplomat said there was little confidence in the White House that the Egyptian leadership was prepared to take the necessary steps to defuse the crisis.

It was reported last night that King Abdullah of Saudi Arabia contacted the White House last week over concerns about changing the regime in Egypt. Saudi Arabia was warning that it would bankroll Egypt if the US withdrew its aid programme worth $1.5bn annually.

"Mubarak and King Abdullah are not just allies, they are close friends, and the King is not about to see his friend cast aside and humiliated," a senior source in the Saudi capital told The Times.

The White House said President Obama spoke to King Abdullah yesterday. "The president emphasised the importance of taking immediate steps toward an orderly transition that is meaningful, lasting, legitimate, and responsive to the aspirations of the Egyptian people," the White House said in a statement. "The president also reaffirmed the long-term commitment of the United States to peace and security in the region."
"We shall not be, we shall not be moved!..." An Egyptian anti-government protester reads the papers as he wakes up near an army tank in Cairo's Liberation Square.