Tens of thousands of people staged a protest in the Egyptian capital against Mursi. "The people want the regime to fall," the crowds chanted.
Protesters and riot police clashed near Tahrir Square, the birthplace of the uprising that toppled former President Hosni Mubarak nearly two years ago.
The new demonstrations came a day after Mursi held a meeting with the nation's top judges to defuse the crisis over the controversial decree, but the meeting failed to break the impasse as thousands of people poured onto the streets in a massive show of defiance.
Protests also spread to outlying provinces including Alexandria, second-biggest city and central parts of the country.
Several other marches were preparing to set off from around the capital to join thousands of protesters already in the square to denounce Mursi's decree.
In the city of Alexandria, several hundred gathered in Qaitbay Square, with two large marches expected to join them later.
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"Down with the rule of the Supreme Guide," protesters chanted, referring to the head of the powerful Islamist group.
After the meeting, Mursi dug in his heels making it clear to the judiciary that he did not infringe on its authority by assuming sweeping powers.
Presidential spokesman Yasser Ali said that Mursi's recent decree would not be subject to modification, noting that the decree may have been "misunderstood" by the public.
The decree, issued by the presidency on Thursday night, was met with outrage by Egypt's opposition, who described it as an "attack on democracy" and a "threat to judicial independence." (more)