An Egyptian judge has ordered a new trial for former President Hosni Mubarak, threatening to reopen old wounds and roil the streets with protests again.

Reuters:

A Cairo court granted Mubarak and his former interior minister the appeal as Egypt prepares to mark the second anniversary of the uprising on January 25.

The retrial is likely to stir emotions and could plunge the government of new President Mohamed Mursi into dangerous waters as he tries to restore law and order and a wrecked economy.

Egypt remains volatile as it prepares for a parliamentary election in the next few months. Anxiety over the economy is on the boil after protests, often violent, in late 2012 prompted citizens to snap up hard currency and take out savings.

During Mubarak's 10-month trial, many protesters accused the then ruling generals and officials seen as loyal to the ousted president of protecting him. A retrial may revive calls for a deeper purge of those viewed as holdovers from the old era.

"The court has ruled to accept the appeal filed by the defendants ... and orders a retrial," Judge Ahmed Ali Abdel Rahman said.

Crowds of Mubarak supporters attending the hearing shouted "God is greatest", clapped and whistled as the judge read out the appeal ruling. Groups of joyful supporters were also spotted handing out sweets in central Cairo.

Mubarak's health and fate are debated intensely in Egypt as people try to turn a page on decades of his iron-fist rule and the political turmoil that followed his downfall.

During the original trial, the televised image of their once feared leader prostrate on a hospital gurney in the defendants' iron cage captivated the nation, drawing a line under his era. The retrial is certain to revive difficult memories.

"If Mubarak and his corrupt aides get lighter sentences this will reignite the revolution and there will be more bloodshed," Ahmed Abdel Ghaffour, a 33-year-old engineer in Cairo.

The judge did not clarify the legal basis for the retrial, nor did he say when the hearings were likely to start.

While President Morsi has tried to purge Egyptian society of the old guard, the judiciary is where Mubarak era holdovers appear to be strongest. They are still a thorn in the side of the Muslim Brotherhood and could derail their drive to dominate Egypt as the country moves toward parliamentary elections - the first under the new constitution - sometime in the spring.

A new trial for Mubarak is likely to bring to the surface all the paranoia about the old regime moving to take over the government. This won't happen, but the Brotherhood could exploit these fears in order to consolidate their power. They are not as popular as they were when they were swept into power last year. Feeding the people's fears may revive their fortunes at the polls.