Clashes broke out in Tahrir Square between protesters and Egyptian security forces early on Wednesday morning, as police fired tear gas.
Live images of the Square showed protesters forming small groups and scuffles starting up.
There was no obvious other move by the police to clear the camp, however.
The demonstrators had bedded in for another day of protest, steeling themselves for further action in a bid to get President Mohammed Mursi to rescind his move to take sweeping new powers.
Tens of protesters took to their tents in the square while others kept the chanting going during the early hours of Wednesday morning.
There were clashes between protesters and police in side streets during the night.
On Tuesday night, Muslim Brotherhood offices were stormed and torched in cities across Egypt, amid a day of nationwide rallies against his assumption of broad powers.
Local Egyptian media reported the Brotherhood’s office in the coastal city of Alexandria was stormed, while protesters in the city of Mansoura torched the Islamist group’s Freedom and Justice Party (FJP) office, formerly headed by Mursi.
Clashes erupted between supporters and opponents of Mursi in the Nile Delta city of Mahalla also, as protesters poured into Cairo’s Tahrir Square.
The Islamist FJP party initially said on its website that 80 of its followers were injured in the Mahalla clashes, and accused police of ignoring requests to intervene. Later, the FJP’s media spokesperson in Mahalla, Mamdouh Mounir, said 200 Muslim Brotherhood members were injured, alleging that anti-Brotherhood protesters had prevented ambulances from reaching the victims, according to Egypt Independent.
Meanwhile, the huge turnout in the iconic Tahrir Square in the heart of Cairo, as well as in most of Egypt’s 27 provinces on Tuesday, marked the largest mobilization yet against the president.
In Tahrir, protesters who had voted for Mursi in the election joined forces with die-hard opponents of the Islamist.
“I’m here to protest Mursi’s autocratic decisions,” said Mohammed Rashwan, an engineering graduate who voted for Mursi in the country’s first presidential election since a popular uprising toppled Hosni Mubarak last year.
Three people have died in clashes since Mursi decreed his new powers.
A rival rally in Cairo by the Muslim Brotherhood on Tuesday in support of the president was called off to “avoid potential unrest” but that has done little to abate the split between Mursi’s supporters and foes.
Meanwhile U.S. officials said Washington was closely following the drama unfolding in Egypt, with a warning that Cairo could put vast amounts of international aid at stake if it veers back off the democratic course.
The situation was evolving, State Department spokeswoman Victoria Nuland said.
“I think we don’t yet know what the outcome of those are going to be. But that’s a far cry from an autocrat just saying, my way or the highway,” she said.
Despite her carefully worded statement on Tuesday, the US embassy in Cairo seemed to suggest that Egypt was indeed on the path to a new dictatorship.
“The Egyptian people made clear in the January 25th revolution that they have had enough of dictatorship,” the embassy tweeted in a message on its Twitter account.
Nuland stressed that “we want to see Egypt continuing on a reform path to ensure that any money forthcoming from the IMF truly supports a stabilization and a revitalisation of a dynamic economy based on market principles.”
The International Monetary Fund on Tuesday said Egypt can still get its $4.8 billion loan, agreed last week, despite the turmoil as long as there is “no major change” in its reform commitments.
The Egyptian protesters are angry at the decree that Mursi announced last Thursday allowing him to “issue any decision or law that is final and not subject to appeal,” which effectively placed him beyond judicial oversight.
The decree put him on a collision course with the judiciary and consolidated the long-divided opposition which accuses him of taking on dictatorial powers.
The demonstrations come a day after Mursi stuck by his decree after a meeting with the country’s top judges aimed at defusing the crisis.
There has been “no change to the constitutional declaration”, presidential spokesman Yasser Ali told reporters at the end of the meeting.
But he added Mursi sought to clarify that any irrevocable decisions apply only to issues related “to his sovereign powers” and stressed the temporary nature of the decree.
The head of the Freedom and Justice Party (FJP) — the Brotherhood’s political arm — said the meeting between Mursi and the judges had been “fruitful”.
But judges said the crisis was not over.
“The meeting failed,” Judge Abdel Rahman Bahlul, who attended the talks, told the independent daily Al-Masry Al-Youm.
“We cannot say this is the end of the crisis between the judiciary and the presidency,” another judge who attended the talks, Judge Ahmed Abdel Rahman, told the paper.
A judicial source told AFP that even if immunity were limited to sovereign powers, “which appears to be a compromise, there are still concerns that the text itself remains unchanged”.
The decree bars the courts from dissolving a controversial panel that is drafting a new constitution. Liberals, leftists and church leaders have already walked out of the Islamist-dominated panel charging that it fails to represent all Egyptians.