BRASILIA (AFP) - President Dilma Rousseff has proposed a referendum on political reform, scrambling to defuse unprecedented social unrest in Brazil that sparked two weeks of nationwide street protests.
She also offered to earmark US$25 billion (S$32 billion) for public transport in response to protesters' exasperation with substandard public services and inadequate mass transit systems in the world's seventh largest economy.
The proposals on Monday from President Rousseff come after demonstrations that have rattled her leftist government, bringing 1.2 million people into the streets on Thursday alone to demand a better quality of life.
Late Monday, street demonstrations persisted with about 10,000 taking to the streets of Porto Alegre in the south and another 2,000 protesting in Rio de Janeiro. Demonstrators in seven smaller cities like Teresina led to scuffles with authorities.
Following crisis talks with protest leaders, and then state governors and city mayors, Ms Rousseff earlier suggested a referendum on the establishment of a constituent assembly tasked with crafting political reform.
"My government is hearing the democratic voices of the streets which are demanding change," she said.
The protests in Brazil initially focused on a hike in transport fares before mushrooming to encompass a variety of gripes including criticism of the huge cost of staging the 2014 World Cup and demands for an end to corruption.
The wave of demonstrations coincides with the Confederations Cup tournament being held in six Brazilian host cities as a dry run for next year's World Cup.
Brazil has spent US$15 billion to stage the two events.
Ms Rousseff called for 50 billion reais (S$28 billion) to be allocated in new investments "to improve public transport in our country," with the construction of metro systems the priority.
Buses are, however, the most common means of transport used by the country's 194 million people, while rising prosperity means an ever increasing number of private cars clog the streets of most major cities, creating traffic chaos.
Ms Rousseff also stressed the need for fiscal responsibility and for boosting investments in health and education as demanded by the throngs who have taken to the streets over the past two weeks.
She has called for the use of oil royalties to boost education and proposing the recruitment of foreign doctors to bolster health services.
After the talks, representatives of the Free Pass Movement (MPL) - which successfully forced authorities in several cities to cancel the fare hikes - said they were open to dialogue but vowed to carry on with protests.
In a brief but noisy protest in Rio, Brazilian dentists were to the fore.
Bearing banners reading "public health should not be a business," a dozen members of the Dentists Take Action group explained their purchasing power was shrinking fast.
"Brazilian people don't like to march like this but power is now starting to come into the hands of the people," one of the group, Cristina Pinho, told AFP.
"It's like John Lennon said - 'power to the people'," she yelled, pointing to two Beatles badges on her coat.
A referendum in Brazil can only be called by Congress, where Rousseff's ruling Workers Party (PT) lacks an absolute majority and governs with a coalition of parties.
Education Minister Aloizio Mercadante told reporters that Congress would decide on a referendum date. Lawmakers are also to work out details of the proposed reform.
The last constituent assembly in Brazil was convened in 1986 in the wake of the 1964-1985 military dictatorship.
A poll by the Ibope institute released on Sunday showed that 46 percent of those who took to the streets had done so for the first time.
However, despite criticism of the high cost of the World Cup, 67 percent said they approved of Brazil hosting a tournament it has won five times, Ibope said.
FIFA Secretary General Jerome Valcke insisted on Monday that football's world governing body had "never received any official offer" from any country to stand in as Cup hosts, amid the unrest and as Brazil races to get ready.
Meanwhile, two women who had taken part in a small protest in the central town of Cristalina died on Monday after being run over by a motorist who ran through a blockade.
That brought to four the death toll in the protests, which began on June 11 in Sao Paulo. Unrest spread quickly and the vast country was engulfed in protest.
Since protests reached a high point on Thursday, they have generally been smaller and calmer. Calls for a general strike next Monday were circulating on social media networks.