* Islamist minister, Christian parliamentarian resign
* President trying to forge consensus for painful reforms
* Islamists and their opponents bitterly divided
* Mursi and allies say Egyptians want end to squabbling
(Adds army chief's remarks, detail on Mubarak)
CAIRO, Dec 27 (Reuters) - An Islamist minister quit Egypt's
government on Thursday, the second cabinet resignation this
week, as President Mohamed Mursi tries to shore up his authority
and gather support for unpopular austerity measures.
An economic crisis and a battle over a new constitution have
underlined bitter divisions between Islamist-backed Mursi and
his liberal opponents and delayed a return to stability almost
two years since a popular uprising.
Rivals accuse Mursi, who won Egypt's first freely contested
leadership election in June, of polarising society by foisting a
divisive, Islamist-leaning constitution on the country and using
the autocratic ways of his deposed predecessor Hosni Mubarak.
Deadly violence preceded a referendum on the basic law,
dealing a blow to a struggling economy. Mursi's political rivals
refused to accept the result - the text won about 64 percent in
the vote - and they reject his call for national unity talks.
In a move that may pre-empt a planned reshuffle,
parliamentary affairs minister Mohamed Mahsoub announced he was
quitting because he disagreed with the slow pace of reform.
"I have reached a clear conclusion that a lot of the
policies and efforts contradict my personal beliefs and I don't
see them as representative of our people's aspirations," he said
in his resignation letter, which has yet to be accepted by the
Communications Minister Hany Mahmoud quit earlier this week,
citing his inability to adapt to the government's "working
Neither were major figures in the cabinet but their decision
to criticise the substance and style of Mursi's administration
suggests his decisions are unnerving not just opponents but also
Earlier on Thursday, a Christian member of Egypt's upper
house of parliament, Nadia Henry, quit a day after the
Islamist-dominated chamber took over legislative authority under
the new constitution.
The charter crafted by an Islamist-dominated assembly is
meant to be the cornerstone of a democratic and economically
stable Egypt after decades of authoritarian rule. The opposition
says it does nothing to protect minorities.
Mursi says the constitution and an upcoming vote to re-elect
the lower house of parliament will help end squabbling among
He and his Muslim Brotherhood allies say ordinary people are
fed up with street protests that often turn violent and want the
government to focus on urgent bread-and-butter issues.
The strife has cast doubt on the government's ability to
push through the spending cuts and tax hikes needed to secure a
vital $4.8 billion International Monetary Fund loan.
The Egyptian pound tumbled to its weakest in almost
eight years against the dollar this week as people rushed to
withdraw savings from banks.
Egypt's defence chief said the army - which dominated Egypt
for decades and has wide ranging business interests - was ready
to step in to help the economy.
"The Egyptian economy is going through a very difficult
stage," Abdel Fattah al-Sisi was quoted as saying by state news
agency MENA. "The armed forces are keen to participate in
development and service projects in all parts of Egypt as part
of its promise to serve the great people."
The resignations come ahead of a promised cabinet reshuffle.
Cabinet sources told Reuters as many as eight cabinet members
from second-tier ministries might go next week.
Mursi is also promising incentives aimed at making Egypt -
once a darling of emerging market investors - an attractive
place to do business again.
The 270-seat upper house, or Shura Council, holds
legislative authority until a new parliament is elected in early
2013. Opposition figures say they fear the Council could issue
laws curbing freedoms.
Henry represents Anglican Christians in Egypt. In a letter
published by state media, she said minority groups were not
represented properly in the chamber.
Her resignation underscores fears by Egypt's Christians, who
make up about a tenth of its 83 million population, about the
gains by Islamists since Mubarak was ousted in 2011.
Mubarak, who was sentenced to life in prison in June, was
moved to an army hospital on Thursday following a fall that
raised concerns about his fragile health.
Under pressure to acknowledge Egypt's diversity, Mursi
appointed 90 members including Christians, liberals and women to
the Council - alongside figures from the Muslim Brotherhood and
ultra-conservative Salafis - last week. Two-thirds of the upper
house were already elected in a vote this year.
"We stress again that the nation should achieve internal
reconciliation and forget its differences," the Muslim
Brotherhood's supreme guide, Mohamed Badei, told Egyptians in
his weekly message.
"Let's work seriously to end the reciprocal wars of
attrition. We urgently need to unify ranks and group together
and focus our capabilities and assets for the general benefit."
(Writing by Maria Golovnina; Editing by Tom Pfeiffer)