A judge sentenced Mubarak, 84, and his interior minister Habib al-Adly to life in prison on Saturday for involvement in the killing of hundreds of protesters during the uprising that ousted them from power last year.
Mubarak, the only autocrat toppled in the Arab Spring to be put in the dock, could have been sent to the gallows as demanded by the prosecution. He was also cleared of graft charges.
Six police chiefs were acquitted, and Mubarak's sons Alaa and Gamal had corruption charges against them dropped on a technicality, prompting protesters to take to the streets in Cairo, Alexandria and other Egyptian cities.
Both the toppled dictator's defence team and lawyers representing his victims said the life sentence verdict could easily be appealed, triggering fears among protesters that he could be ruled innocent.
Around 20,000 people took to Cairo's iconic Tahrir Square on Saturday after the verdicts were issued.
Some of the demonstrators slept in tents or out in the open overnight on the vast intersection, epicentre of the 18-day revolt that forced Mubarak to resign on February 11 last year.
"We intend to stay today and possibly tomorrow. We expect a lot more people to come during the day," said Omar Abdelkader, a young protester in Tahrir on Sunday.
"Many people had the feeling while listening to the verdict that we were back in the days of the old regime," said student Feda Essam, another protester in the square.
The demonstrators erected a memorial depicting a miniature cemetery made of gravestones and sand in tribute to the "martyrs" of the revolution.
"Martyrs, we will not abandon you to the conspiracies of the old regime. In the name of your blood, there will be a new revolution," said a banner.
Egyptian stocks dropped 2.4 percent within half an hour of opening with the main EGX-30 index sliding to 4574.17 points.
"The street's lack of acceptance of the verdicts has cast a shadow over the Egyptian stock exchange, with individual investors selling," said financial analyst Walid Abdeen.
Early on Sunday, offices of presidential candidate Ahmad Shafiq, Mubarak's last prime minister, were attacked in two provincial towns, a security services official said.
Shafiq's campaign headquarters in Cairo had already been attacked last Monday.
On Saturday after the verdicts were passed, the Muslim Brotherhood's presidential candidate Mohammed Mursi said the revolution must continue.
"All of us, my brothers, must realise in this period that the continuation of the revolution, and the revolutionaries' staying put in their positions in the squares, is the only guarantee to achieve the goals," he told reporters before joining the crowds in Tahrir Square for around 15 minutes.
A tearful Mubarak, who enjoyed near absolute power for three decades, was flown by helicopter to Tora prison on Cairo's outskirts after the verdict but then refused to leave the aircraft.
A security official said Mubarak "suffered from a surprise health crisis" but was finally convinced to go to his cell.
Chants of "Void, void" and "The people want the judiciary purged" erupted after the sentencing.
The powerful Muslim Brotherhood said it had called for mass protests nationwide, while other groups including the pro-democracy April 6 movement announced they would also hold demonstrations.
There were similar protest rallies in Alexandria, on the Mediterranean coast, and other parts of Egypt, where many were in shock at the police chiefs' acquittal.
Rights groups also slammed the verdict.
Mubarak's sentence "is a significant step towards combatting long-standing impunity in Egypt" but the security chiefs' acquittal "leaves many still waiting for full justice," Amnesty International said.
"Many see the acquittal of all the senior security officials as a sign that those responsible for human rights violations can still escape justice."
Mubarak's defence team said it will appeal against the verdicts.
"We will appeal. The ruling is full of legal flaws from every angle," Yasser Bahr, a senior member of the defence team, said. "We will win, one million percent."
Saturday's verdict comes just two weeks before a presidential election run-off that will pit Shafiq against the Brotherhood's Mursi in a highly polarised race.
It is the first openly contested presidential election in any of the Arab countries swept by protests and uprisings since 2011 challenging decades of autocratic rule. (AFP)
CAIRO: Hundreds of Egyptians occupied Cairo's Tahrir Square on Sunday after a night of rage against what they feel were lenient sentences handed down to ousted dictator Hosni Mubarak and his security chiefs.
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