* Draft law to retire judges shunted to committee
* Battle over judiciary has polarised politics
* Islamists say judiciary filled with Mubarak-era appointees
* Opposition accuses Brotherhood of planning "judges' massacre" (Recasts with moves to defuse row, send bill to committee)
By Paul Taylor
CAIRO, April 23 (Reuters) - Egyptian President Mohamed Mursi's Islamist allies acted on Tuesday to defuse a row over attempts to force out thousands of judges, sending a bitterly opposed judicial reform bill to a parliamentary committee for further consideration.
After emergency talks with the Supreme Judicial Council and the prosecutor general on Monday, Mursi's office issued a late-night statement saying the president considered protecting the independence of the judiciary was his constitutional duty.
"The president confirmed definitively that he... does not accept any violation of the judiciary or insults against personalities of the judiciary," it said.
The secular and liberal opposition had condemned a draft law that would have imposed mandatory retirement on judges at 60 instead of 70, forcing out many senior judges who have angered the Islamists by annulling election laws and acquitting officials of ousted former President Hosni Mubarak's regime.
The political battle over the judiciary has become another obstacle to efforts by the United States, the European Union and the International Monetary Fund to promote political reconciliation to help Egypt fight a deep economic crisis.
The speaker of the upper house of parliament, Muslim Brotherhood politician Ahmed Fahmy, told lawmakers the bill proposed by the moderate Islamist Wasat Party had been referred to the constitutional affairs committee, which would study it and compile a report.
That means it will no longer be rushed through parliament on Wednesday as initially planned, allowing more time for consultation and possible compromise.
Only days after the Brotherhood staged a mass demonstration in Cairo to demand a "purification" of the judiciary, its political arm, the Freedom and Justice Party, distanced itself from the draft. Sobhi Saleh, a senior FJP lawmaker, told Al Jazeera's Egyptian news channel the bill was just a proposal.
The opposition National Salvation Front said on Monday the law would eliminate more than 3,000 judges at a stroke, calling it prelude to the "Brotherhoodisation" of the judiciary, and called for demonstrations outside parliament.
Judges, who denounced the bill as unconstitutional, are to hold another meeting on Wednesday at which attendees said they would demand that any legislation affecting the judiciary be sent to them for review before it is ratified.
"PURIFICATION" OR PURGE
Justice Minister Ahmed Mekky tendered his resignation on Saturday after the Brotherhood demonstration against the judiciary, seen by many Islamists as infested with Mubarak-era appointees hostile to Egypt's 2011 democratic revolution.
Local media quoted Mekky, who stood up for judges' freedom under Mubarak's rule, as saying he would only stay in his job if he received official guarantees regarding judicial independence.
The constitutional court has repeatedly stymied Mursi's legislative and election plans, and appeals courts have acquitted or released some former Mubarak officials charged with corruption and abuses of power.
The clash highlights rival sources of legitimacy that have co-existed uneasily in Egypt since Arab Spring street protests toppled Mubarak. Most of the laws and judges date back to his authoritarian rule and some have been used to frustrate the plans of new bodies elected since the uprising.
Mubarak and his former interior minister were sentenced to life imprisonment last year for complicity in the killing of hundreds of demonstrators during the revolution, but an appeals court threw out the verdict in January and ordered a retrial, which has already stalled once and is due to start on May 11.
Two courts have ordered Mubarak's release since he has served the maximum permitted time in pre-trial custody, but the authorities have kept him in jail because he is facing other charges for which the detention term has not yet expired.
Mursi has said he plans a cabinet reshuffle, expected next week, that Western officials hope may bring a more inclusive, politically balanced government and enable the NSF to drop plans to boycott parliamentary elections due later this year.
However, the attempt to purge the judiciary has polarised Egyptian politics again, deepening opposition suspicions that the Brotherhood wants to monopolise rather than share power. (Additional reporting by Alexander Dziadosz, Tom Perry and Asma Alsharif; Editing by Andrew Heavens)