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Egypt will hold elections in four stages and hopes to quell turbulence in the sharply divided country.
(Fixes typographical error in 1st para)
* Mursi decrees four-stage vote beginning April 27
* Opposition must decide whether to boycott or take part
* Government hopes election will end turbulent transition
* Country more sharply divided than since Mubarak downfall
By Marwa Awad and Yasmine Saleh
CAIRO, Feb 21 (Reuters) - President Mohamed Mursi on Thursday called parliamentary elections that will begin on April 27 and finish in late June, a four-stage vote that the Islamist leader hopes will conclude Egypt's turbulent transition to democracy.
The vote will take place in a country deeply divided between Islamist parties that have come out on top in all elections held since Hosni Mubarak was ousted in 2011 and more secular-minded opposition parties that have struggled to get organised.
The Islamist-led administration hopes the election of the new parliament will help stabilise Egypt so an economy in deep crisis can start to recover from spasms of unrest and violence that have dogged the transition.
The new parliament will convene on July 6, according to a decree issued by Mursi. The Shura Council, the upper house of parliament, earlier adopted an electoral law that cleared the way for Mursi to set the date for the lower house election.
Under the new Egyptian constitution adopted in December, Mursi must secure parliament's approval for his choice of prime minister, giving the chamber more power than it had under Mubarak, when it was no more than a rubber stamp.
With Egypt so polarized, the stakes are high for the Freedom and Justice Party, the political arm of the Muslim Brotherhood.
The party has said it will seek an outright majority in the vote, an outcome that would allow Mursi administration to press ahead with its plans for a country caught in political limbo despite the Islamist victory in last year's presidential vote.
Opposition groups have accused Mursi and the Brotherhood of seeking to dominate the post-Mubarak order, accusations denied by the Islamists but which have fuelled protests against his rule.
The opposition must now decide whether to take part in the vote and try to gain a foothold in Egypt's elected institutions or boycott in an attempt to deny legitimacy to the process, analysts said.
"This confronts them with a real dilemma," said Nathan Brown, professor of political science at George Washington University and an Egypt expert.
"If you have a majority that is very sympathetic to the president, then the president can do an awful lot," said Brown. "If you have a parliament that is fractured, you could have a system of infighting and even gridlock."
The Mursi government is seeking to revive Egypt's stagnant economy with a $4.8 billion loan agreement with the International Monetary Fund. But approval of an IMF deal and the austerity measures it would imply could hit the Brotherhood's popularity ahead of the elections.
Each stage of the vote will comprise an initial two days of voting, with a further two days of voting slated for run-offs for closely contested seats. Mohamed Gadallah, a legal adviser to Mursi, had earlier said the voting would begin on April 28.
The vote would be held in phases in different regions because of a shortage of poll supervisors. The last lower house election, which was won by Islamists, lasted from late November 2011 until January the following year.
Mursi had been expected to ratify the electoral law by Feb. 25. The lower house was dissolved last year after the court ruled the original law used to elect it was unfair.
On Monday the Constitutional Court demanded changes to five articles of the revised electoral law. The Shura Council accepted this ruling and adopted the legislation without a vote on Thursday.
"The decision of the Constitutional Court is binding and we have no right to vote on it. It must be carried out," said Ahmed Fahmy, the Council's speaker.
The new law bars members of parliament from changing their political affiliation once elected. Under ousted president Hosni Mubarak, independents were often cajoled into joining the ruling National Democratic Party (NDP), which monopolised parliament and political life before the 2011 revolution.
The law also stipulates that one third of the lower house should be designated for independents and bans former members of the now-defunct NDP from participating in politics for at least 10 years.
(Additional reporting by Tom Perry; Writing by Marwa Awad and Tom Perry; Editing by Roger Atwood)