Corruption in Egypt is on the rise, watchdog Transparency International said on Saturday in a report that called for an urgent overhaul of election procedure and the role of the judiciary to be strengthened.

The Berlin-based group said Egypt's efforts to combat the abuse of power were blighted by a widespread conflict of interest, political interference, weak enforcement of laws and a lack of access to public information.

'A sound regulatory system has recently been put in place to prevent abuses by companies in the financial system,' the report said. 'However, there is a need for stronger rules governing conflict of interest for businessmen holding executive or legislative positions.'

The report called for urgent revamp of an ineffective voter registration system ahead of parliamentary elections this year and a presidential vote in 2011.

'Progress has been made in improving the monitoring of elections at the presidential level following the latest constitutional amendments, but not at the local and parliamentary levels,' it said, noting that a commission independent of the Interior Ministry had been created to supervise the presidential vote.

The judiciary, 'which is perceived as being one of the least corrupt and most independent public authorities in Egypt, and which enjoys widespread respect from the public' could be strengthened by better disclosure and should have its primary role monitoring elections reinstated, the watchdog said.

A prominent judge resigned late last year in protest at the government's interference in judicial and political matters.

Restrictions on all political parties except the ruling National Democratic Party (NDP) exclude them from a major role in governance, the report said. A state media bias in favour of the NDP, restricted freedom of assembly and the state monitoring of political funding also hampered democratic process, it said.

Egypt's four main opposition parties held a conference last week, in a coordinated push for reform before the elections, that they said was either ignored or misrepresented by state media.

The watchdog said Egypt's bloated civil service was burdened by a culture of hiring to cushion against high unemployment and promotion based on seniority rather than merit, while low pay made stamping out corruption much more difficult.

'Without serious reform of the wage system corruption is likely to increase,' it said. 'Corruption is likely to take place when wages cannot cover basic living expenses.'

The report called for more transparency of political funding, especially of the NDP, and more diverse political coverage in the media. It also said mechanisms for whistle-blowing should be improved, and penalties for unproven complaints should be dropped.-Reuters