Arafat, a respected Palestinian-born doctor who is credited with creating an efficient emergency medical system in Romania, resigned after criticising the draft bill, which aimed to privatise parts of the health system and is backed by President Traian  Băsescu.

Protests which initially began on Thursday in support of Arafat have widened to express general discontent against government spending cuts. Arafat's return is unlikely to satisfy thousands of Romanians who have staged street protests for five straight days and are gearing up for more.

Protests in Bucharest yesterday (18 January) drew more than 1,000 people but were largely peaceful. Thousands of protesters demonstrated in other cities. Arafat was reinstated a deputy minister yesterday.

Riot police estimated that 13,000 protestors have hit the streets across the country since Friday. Bucharest has seen Romania's worst unrest in more than a decade.

Small rallies in support of Arafat quickly turned into wider protests calling for the resignation of Băsescu and Boc's centrist coalition government, even though it has now withdrawn the healthcare bill.

"He will resume his job as deputy health minister," Boc told reporters. "Mr Arafat remains the same expert and professional in his field ... and will be part of the team working on the new healthcare bill."

Unlike other European states, Romania had managed to avoid violent protests despite cutting state wages and jobs, freezing pensions and raising value added tax in 2010 to shore up public finances it committed under an international aid deal.

In Bucharest at the weekend, protestors smashed windows, set fire to newspaper stands and rubbish bins, damaged bus stops and buildings and hurled stones at riot police, who used tear gas.

"I think officials realised they have made a mistake in pushing away a reputed expert," said Cristian Pătrășconiu, a political commentator. "But this move will not cancel the idea of protests, which have long ago moved to other topics than healthcare."

Earlier in the day, Romanian media said the International Monetary Fund had postponed a mission to review Romania's precautionary aid deal due to the protests but the Fund said it would stick to its scheduled visit which starts on 25 January.

"In contrast to what has just been reported in the press today, the IMF mission is still on schedule as indicated in the press notice previously sent," it said in a statement.