Egypt on Wednesday offered civil servants and public sector workers a pay rise of up to 30 per cent in an effort to quell discontent over rising food prices.

Hosni Mubarak, the president, made the announcement in his annual May day speech to trade unionists. It came just days ahead of a general strike to protest against high prices called by leftist activists and endorsed by the Muslim Brotherhood, the banned group which is the largest opposition force in the country.

The Egyptian president said to resounding applause from the floor that he had insisted the government double the pay rise originally proposed in the budget to bring it to 30 per cent.

“I follow hour by hour [news] about the bread lines, the price increases, the concerns of families in general and of the poor and those on limited incomes in particular,” Mr Mubarak said.

He urged the private sector to keep up with the rises.

Mr Mubarak did not explain where the extra funds would come from, though he hinted that it could be from a reduction in the country’s hefty fuel subsidy which will reach $11.7bn (€7.4bn, £5.8bn) in the 2008-09 budget. He described the subsidy as benefiting the rich more than the poor.

Youssef Boutros-Ghali, the minister of finance, had told the Financial Times the rises would probably be met through the imposition of taxes on consumption, but that there would be no new burdens which impacted on production or profitability.

Mr Mubarak signalled Egypt’s determination to press on with economic reform. He argued that the steps taken to liberalise the economy had made it possible to pay for more expensive imported food without having to scramble to find foreign currency, as happened in the past.

He also warned that he would “face with the force of the law and its firmness those who take lightly the security and stability of the country”, in an apparent reference to those organising Sunday’s general strike.

The Egyptian authorities have been worried that widespread anger over prices could lead to a social explosion that would play into the hands of the Muslim Brotherhood.

A general strike called by liberal and leftist activists in early April produced a feeble response, but there were two days of riots in the delta town of Mahalla El Kobra after police prevented industrial action by textile workers.

A group of doctors and university professors were also forbidden from taking supplies to the injured in the Mahalla riots in an apparent effort to ensure that the economically deprived would not link up with those pressing for political change.