By Tom Perry and Maggie Fick
CAIRO (Reuters) - Egyptians overwhelmingly approved a new constitution by referendum, state media reported on Thursday, a widely expected outcome that nudges army chief General Abdel Fattah al-Sisi ever closer to a bid for the presidency.
The vote advances a transition plan the military-backed government unveiled after deposing Islamist president Mohamed Mursi last July following mass unrest over his rule.
The constitution won wide support among the many Egyptians who favored Mursi's removal. The Muslim Brotherhood had called for a boycott, saying the vote was part of a coup that deposed an elected leader and revived a brutal police state.
But the vote was also a sign of widespread yearning for a return to stability after almost three years of violent disorder that has crippled the economy, impoverishing many.
The next step is expected to be a presidential election for which Sisi - wildly popular among his supporters - appears the only serious candidate. He has yet to declare he will run.
Around 90 percent of the people who voted approved the constitution, state-run media reported. Al-Ahram, the state's flagship newspaper, said the constitution was approved by an "unprecedented majority", citing early results.
The authorities, who have billed the transition plan as a path to democracy, have also jailed leading Islamists and, in recent weeks, secular-minded activists, including prominent figures in the 2011 uprising against President Hosni Mubarak.
Mursi and other top Brotherhood politicians are standing trial on charges including inciting violence and conspiring with foreign militant groups against Egypt. Several members of the secular protest movement have also been jailed for breaking a new law that tightly restricts the right to demonstrate.
While Western states have criticized the crackdown and called for inclusive politics, they have put little pressure on Cairo for certain strategic reasons.
Egypt controls the Suez Canal, the fastest sea shipping route between Asia and Europe, and has been a cornerstone of U.S. policy in the Middle East since the 1970s, when it became the first Arab state to make peace with Israel.
55 PERCENT TURNOUT
An Interior Ministry official said turnout appeared to be more than 55 percent in what was the first vote since Mursi's overthrow. A pro-Mursi alliance, which had called for a boycott, alleged fraud had occurred but offered no proof.
State media, on the other hand, gave a more conservative estimate of 40 percent turnout but said that the percentage of approval of the constitution exceeded 95 percent, according to initial estimates.
"Early indications point to the fact that Egyptians made history this week with a high level of participation in the vote on the draft Constitution," Ehab Badawy, Egypt's spokesman for the presidency, said in a statement.
"This vote represents a resounding rejection of terrorism and a clear endorsement of the roadmap to democracy, as well as economic development and stability."
A decree is expected within days setting the date for presidential and parliamentary elections, Al-Ahram reported. The official result is expected to be announced on Saturday.
The constitution was drafted by a 50-member committee appointed by decree. It deletes controversial Islamist-inspired provisions written into the basic law approved when Mursi was still in office, and strengthens the state bodies that defied him: the army, the police and the judiciary.
Some of the Islamists' opponents pointed to the result as proof of a popular mandate for Mursi's ouster. "The Egyptians write the Brotherhood's death certificate," Al-Youm Al-Sabea, a privately owned newspaper, declared on its front page.
Rights groups criticized the detention of seven activists from a moderately Islamist party campaigning for a "no" vote.
In a statement, the foreign ministry said they were arrested on suspicion of law-breaking and all but one of them, held in relation to a past conviction, had been released. It added that there was no ban on campaigning for a "no" vote.
The Brotherhood had called for protests during the voting. Nine people were killed on the first day of voting in clashes between its supporters and security forces. The Interior Ministry said 444 people were arrested during the two-day vote.
A student was killed and four others injured in clashes between opponents and supporters of Mursi's Muslim Brotherhood at Cairo University on Thursday, security sources said.
STOCK MARKET RALLY
The referendum appeared to be a public vote of confidence in Sisi, 59, widely viewed as the most powerful figure in Egypt and by his supporters as the man needed to restore stability.
"I believe this is the most convenient time for Sisi to make an announcement if he has the intention to run," said Mohamed Qadri Said, a retired army general who works at the state's Al-Ahram Centre for Strategic and Political Studies.
"I do not see anyone else running against him. He has done great things to the country and the people like him."
The stock market has rallied to three-year highs this week, driven partly by hopes for more stable government.
But the country has also seen the bloodiest internal strife in its modern history since Mursi's ouster. Bombings, attacks on security forces and bloody street violence occur regularly.
The government declared the Brotherhood a terrorist organization on December 25. The group, outlawed for most of its 85-year life, says it remains committed to peaceful protest.
(Additional reporting by Ali Abdelatti and Sameh Bardisi; Editing by Mark Heinrich)