The Egyptian president has announced he will step down later this year and promised to work towards a peaceful transition.
Amid intense domestic and international pressure to relinquish power, Hosni Mubarak said he would not be running for another term of office in the September elections.
In a speech broadcast on state television, and relayed to hundreds of thousands of protesters gathered in Cairo's main square, he said he would work during "the final months" of his term to ensure a "peaceful transfer of power".
It was not immediately clear whether his concession would be enough to defuse the crisis which has crippled Egypt over the past week. His critics have been demanding he go this week.
"In all sincerity, regardless of the current circumstances, I never intended to be a candidate for another term," Mr Mubarak.
An estimated 250,000 people flooded Tahrir Square in Cairo in the biggest demonstrations so far. Soldiers at checkpoints set up at the entrances of the square did nothing to stop the crowds from entering.
Earlier, Prime Minister David Cameron spoke to Egyptian prime minister Ahmed Shafiq, urging his government to "urgently listen to the aspirations of its people".
A Downing Street spokesman said: "The Prime Minister called for an orderly transition to a broad-based Government, including opposition figures. The Prime Minister also said that bold steps were needed to produce real, visible and comprehensive change, with a clear path to free and fair elections."
The Foreign Office is chartering its own flight on Wednesday to ensure Britons are not left stranded in crisis-stricken Egypt.
The 200-seater Boeing 757 could be followed by further flights if they are necessary but the Government said people who want to leave Egypt should be able to do so on commercial flights. British tourists in Cairo, Alexandria and Suez have been advised to leave where possible.
