The Egyptian cabinet has said that it will increase pay and pensions for public sector workers by 15 per cent in a bid to stabilise the country.
Newly-appointed Finance Minister Samir Radwan has said the move will cost Egypt E£6.5bn ($1.1bn). The increase will take effect in April and affect six million state sector employees.
The move is seen as a strategy to bolster the struggling regime. In the past, public sector employees have provided constant support to the government. However, this has shown signs of changing in recent years as consumer prices have risen and pay has remained static.
The policy of increasing public sector wages has been used in the past to quell public discontent with some success. However, as protests continue in Tahrir Square, the increase is likely to prove insufficient.
The protests, which have raged in the capital and major towns for two weeks, have brought the country to a standstill. The government has this week attempted to return the country to normality.
Government ministries returned to work on 6 February and banks have re-opened. The stock exchange is closed but is expected to reopen on 13 February.