By SARAH EL DEEB, Associated Press

CAIRO – Egypt's military rulers plan to scrap a law that has severely restricted the formation of political parties, a government official said Saturday, the latest liberalization of the strict regime of ousted President Hosni Mubarak..

The official said that the restrictions that gave Mubarak a virtual veto over establishment of political parties would be lifted after a referendum next week on constitutional changes to allow for fair parliamentary and presidential elections.
Alongside the pledge for reform, that was a clear statement that the rulers are rejecting demands by reformers to postpone or call off the referendum.

The official, speaking on condition of anonymity because he was not authorized to speak to reporters, said new political parties will only need to notify authorities of their formation. Under Mubarak, they had to receive approval from a committee dominated by his ruling party, which ensured his control over rivals. The referendum scheduled March 19 asks Egyptians to vote on changes that would loosen restrictions on who could run for president, opening the field to independents and candidates from small opposition parties. Also, it would impose a two-term limit on future presidents.

The previous system allowed Mubarak to rule for three decades and gave his ruling National Democratic Party a veto over who could run against him.
Critics say the changes don't go deep enough to change what they see as a faulty constitution, nor do they limit the powers of the next president.

The protesters also complain the plan to hand over power to a civilian administration six months after the military took charge means that parliamentary elections would come too soon and deny new political parties a chance to campaign. They fear old that political players, such as Mubarak's ruling party or the Muslim Brotherhood, would take control of a new parliament.

The Brotherhood, Egypt's best organized political group, welcomed the proposed amendments and said it will vote in favor. The group's spokesman, Essam el-Erian, said in a statement on the group's website Saturday that the changes require a new parliament to write a new constitution that would meet further calls for change.
Also Saturday, two cousins jailed for their role in the assassination of then-president Anwar Sadat in 1981 were released to a huge welcome, their lawyer Nizar Ghorab said.

The military council ordered their release Thursday.
Abboud and Tarek el-Zomor served multiple sentences for their role in the shooting death of Sadat during a Cairo military parade. Ghorab said they were kept behind bars because Mubarak's regime feared their return to political life.

They were convicted in 1984 of plotting the assassination and of belonging to the outlawed Islamic Jihad group — but not of actually killing Sadat. The five prime suspects, including the shooter, were captured and executed.
Tarek el-Zomor was ordered released in July 2005, but he was not set free because of an Interior Ministry's discretionary power to hold a prisoner for up to five more years on security grounds. Abboud el-Zomor was also expected to be released after serving his term but was kept behind bars on the same grounds.