By Edmund Blair and Marwa Awad
CAIRO (Reuters) - A deft businessman and politician tempered by years in Hosni Mubarak's prisons, Khairat al-Shater is aiming to bring Egypt's Muslim Brotherhood to the pinnacle of power for the first time in its 84-year history. But his candidacy for the presidency has exposed rifts in the Islamist group's ranks, worried liberals and could turn up the heat in a row with Egypt's ruling army.
Without even a day of campaigning under his belt but by virtue of the Brotherhood's broad grassroots network, Shater, 61, moves straight into the ranks of frontrunners for the job Mubarak held for 30 years until he was ousted last year.
It marks a dramatic shift for the Brotherhood which has U-turned on its earlier pledge not to field a candidate to avoid charges of monopolizing power in post-Mubarak Egypt. It is also a big change for Shater, a respected strategist for the group who until a little more than a year ago worked in a prison cell.
Yet his candidacy may splinter the Islamist vote, already split between at least three other candidates, and that could hand an advantage to rivals who the army might prefer to see in power, although generals insist they will not get involved.
Shater, a father of 10 whose businesses range from computers to furniture, spent years in and out of jail under Mubarak, who banned the Brotherhood and periodically rounded up its members.
"He is a national hero to Egypt. He created an institution from the sweat of his brow and when it was destroyed because he was in competition with the son of the toppled president, he was jailed and injustice done to him," said Mohamed Badie, the Brotherhood's leader when his candidacy was announced.
But the announcement has generated some swift criticism from both inside and outside the Brotherhood, whose party controls the biggest bloc in parliament and which dominates an assembly that is drawing up the constitution.
"It is the right of the Brotherhood to field its own candidate but they should know they are losing much of their credibility and expanding the divide between them and the rest of Egypt's national groups," wrote Mohamed Habib, a former Brotherhood deputy leader, on his Twitter feed.
Shater kept a low profile immediately after Saturday's decision, issuing a brief statement resigning from his position as a deputy leader. Brotherhood members said plans for his campaign were being drawn up and it could be launched this week.
After years working beyond the public's view, Shater's central role in Brotherhood thinking has become more obvious since his release after Mubarak was toppled in February 2011.
Western and other officials have lined up to meet him. The International Monetary Fund team, seeking a broad consensus for a $3.2 billion loan deal, met him for talks.
One Western diplomat described a calm persona who "exuded control" in one meeting but detected traces of a "bully" in another more heated discussion. "He needs to have grown a thick skin of self-preservation, given his time in jail," he said.
Seen as the group's chief financier and a moderate, one Brotherhood member described Shater as a "excellent strategist" who has kept a tight rein on dissent although that has left some youths disenchanted. But his public message is one of inclusion.
"Egypt will not return to the days of one-party rule. The Brotherhood will help strengthen other parties. Even if one party is a majority, it should never have a monopoly," he told Reuters in an interview in March, 10 days after he was freed.
Yet monopolizing power is how some see the decision to back him for president, a move that could bring the Brotherhood to the pinnacle of power for the first time in its 84-year history.
"It's outrageous. You make a promise, you should keep it," said Yumna Emam, a 28-year-old public affairs coordinator in Cairo. "I only hope people will not fall for it and vote for him after all that."
Ahmed Said, leader of the liberal Free Egyptians, said the group was "proving each day that power is their only goal".
The Brotherhood has been embroiled in an increasingly fierce row with the ruling military council, which had rejected the group's demand that it sack the army-appointed cabinet.
The Brotherhood says it should form the new cabinet to reflect the parliamentary majority. But the existing constitution gives that power to the military or the newly elected president. The army has refused to back down and defended the performance of its cabinet and the army's handling of the transition.
Explaining the decision to field a candidate, Brotherhood Secretary-General Mahmoud Hussein cited the refusal to sack the cabinet and referred to "a real threat to the revolution and the democratic transition to an elected civilian government".
Though it has swept up seats in parliament, analysts say the Brotherhood remains wary of the military and memories of crackdowns under Mubarak and his predecessors are still fresh.
Shater was last arrested in 2006 and jailed the following year. He was first detained in 1968 under Gamal Abdel Nasser. Egypt's military has dropped two court convictions against him clearing him to run, the Brotherhood's lawyer said on Sunday.
If Shater secures the presidency, the make-up of the cabinet will be in the Brotherhood's hands. But the race will not be plain sailing for Shater, even with the Brotherhood behind him.
The Islamist vote is already split among three main Islamist candidates. And two have built a popular support base.
They are Hazem Salah Abu Ismail, who follows a much more conservative interpretation of Islam than the Brotherhood, and Abdel Moneim Abol Fotoh, kicked out of the Brotherhood for announcing he would run for president before the group changed tack. Shater was among officials who decided to eject him.
The popularity of those candidates may have been one reason for announcing Shater's candidacy: to avoid being outflanked by Islamist rivals. But the move comes with other pitfalls.
With the Islamist vote divided, other candidates could benefit including a former Arab League chief who once served as Mubarak's foreign minister, Amr Moussa, and Ahmed Shafiq, a former military commander like the ex-president who was also Mubarak's last prime minister.
"It could also play in favor of someone who is not belonging to the Islamic trend," political science professor and activist Hassan Nafaa said. "If that is the case ... the Muslim Brotherhood will be considered responsible for this result."
The Brotherhood may yet use its weight to unite Islamist voices behind Shater. Abu Ismail has in the past suggested he might consider standing aside. But Abol Fotoh has insisted he will not halt his campaigning for anyone.
(Additional reporting by Yasmine Saleh and Dina Zayed; Writing by Edmund Blair; Editing by Ralph Boulton)