Mubarak made the announcement during a televised speech on 30 April to mark Labour Day.

The move, which will affect 5.7 million people, is designed to help Egyptians cope with the rising cost of food and essential commodities. It is unclear where the additional funds will come from.

The draft budget for 2008/2009 proposes an increase in spending on food subsidies from £E9.5bn to £E20bn and an increase in oil subsidies to £E62.7bn, from £E56bn in the previous year (MEED 2:4:08).

Leftist activists have called for a general strike on 4 May to protest against low salaries and high inflation. The Muslim Brotherhood has voiced its support for the strike action.