CAIRO, Feb 7: Egypt's newly formed government has agreed to raise public sector salaries and pensions by 15 per cent, the state-controlled MENA news agency reported on Monday.

The increase appears to be the latest measure by the government to defuse people's anger, on the 14th day of street protests by Egyptians demanding that President Hosni Mubarak step down.

It will become effective in April, MENA said, quoting new Finance Minister Samir Radwan who added that the cabinet's legislative committee had approved the raise.

Increasing allocations for civilian and military pensioners will cost the treasury 6.5 billion Egyptian pounds ($940 million), Radwan said.—AFP