Egypt on Wednesday plunged deeper into its worst political crisis since President Mohammad Mursi took office in June.

Egypt on Wednesday plunged deeper into its worst political crisis since President Mohammad Mursi took office in June, with massive opposition rallies nationwide signaling a new "revolution" nearly two years after Hosni Mubarak was toppled.

Egyptian Police fired tear gas into Cairo's Tahrir Square early Wednesday, where several hundred protesters spent the night after a mass rally to denounce what they call ‘Mursi's power grab’.

Clashes that have been erupting on streets just off Tahrir near the US embassy spilled into the square, with canisters falling into the crowd forcing protesters to run and sending clouds of tear gas over the tents housing the demonstrators.

The outskirts of the square have seen sporadic clashes now entering their ninth day, in what started as an anniversary protest to mark one year since deadly confrontations with police in the same area.

Clashes also raged through the night between supporters and opponents of Mursi in the Nile Delta city of Mahalla and the canal city of Port Said.

In Mahalla, 132 people were injured while 27 were hurt in Port Said, medical sources told Agence France Presse. According to a security official, calm in both towns had been restored by morning.

Tuesday's huge turnout for a protest rally marked the largest mobilization yet against the president.

Protesters are furious 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.

Mursi's decree also bans any judicial body from dissolving the controversial panel, putting him on a collision course with the judiciary.

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.