He said: "Now Parliament has the right to act. The government is responsible to Parliament. Parliament chooses the prime minister. It is for Parliament to regain the necessary trust of society. The parliamentary majority holds the key to solving the problem."

Referring to the disorder that has been seen since 17 September, he said: "It would be to the detriment of the country if things continued to move forward in the same rut."

He added: "The prime minister's speech to his colleagues on the Socialist benches shocked the country when it came to light. The outrage was justified. For me, the peaceful demonstrations we have seen around the country are proof of people's healthy moral sense. But we have yet to gain catharsis." The local election campaign had driven events up until now, but the fundamental moral problem had been lost from view behind the explanations given and the events that had taken place.

The president said the current situation was not on which a secure structure could be built. He said: "The prime minister is ducking away from addressing the fundamental question. He does not recognise that he used unacceptable methods in order to hold on to power and thus make a start on putting the country's finances in order. This undermines confidence in democracy."

Laszlo Solyom said the prime minister had branded the politics of the past 15 years a lie. Ferenc Gyurcsany could not conceal the fundamental moral problem by claiming his actions in reforming the finances of the health system, pensions, education and state subsidies were brave.

Solyom said bringing order to the budget was the most urgent task. He supported these measures, he said. No government could escape responsibility for the current state affairs, he said: every government was to blame for the heavy burden on the shoulders of the population. Nonetheless, an economic reform programme could not be successfully implemented without the trust of the people it affected.

Solyom said this loss of confidence was being expressed by the demonstrations being held around the country. However, the violent acts that had been seen on the night of 19 September on Szabadsag ter, when the Hungarian TV building was besieged, were in a different category from the peaceful demonstrations. These acts he condemned outright.

It was important not to neglect constitutional form, even in difficult times, he said. It was wrong to violate people's political rights by gathering information at peaceful events, he said. The police had to respect the law in the way it dealt with the people it arrested, he said.

Solyom said it was dangerous for protesters to make unconstitutional demands. This, too, was a source of uncertainty.

Solyom said the events of the past two weeks had further deepened the "tragic divide" in Hungarian society. Events had weakened people's faith in parliamentary democracy, at a time when the country's economic situation made a minimal degree of social consensus and co-operation indispensible.

"If things carry on as they have been, then that minimal consensus will not be achieved," he said. Parties should interpret the election results in that light, and should plan their next steps in full awareness of this responsibility.

Turning to the flood of letters, petitions and requests he had received, he stressed that he had no legal right to intervene in the present situation.

"When I took office, I promised that I would try to restore the office to its original legal parameters. As far as the fundamental questions of democracy are concerned, I must give the same answers, whether to the Right or to the Left," he said.

Peter Szijjarto, the spokesperson for the Fidesz opposition party, thanked Solyom for his "clear speech, his clear guidelines."

Gabor Horn, a senior Free Democrat, claimed there was no evidence for the collapse of confidence Solyom had spoken about. The Free Democrat told a TV channel, that a few thousand people, and on one occasion 15,000 people had been demonstrating. He claimed that people waving the shield of the medieval Hungarian king Arpad - frequently associated with right-wing causes - and those compiling lists of Jewish names could not be called peaceful demonstrators. The government parties would carry on their work from Monday, bearing in mind the president's words, he said.