An Egyptian citizen who tried to overturn state land sales to Palm Hills and Saudi's Kingdom Holding has withdrawn the claims, saying there was little point continuing while the government is doing little to fight graft.

Engineer Hamdy Fakharany has filed a string of challenges to state land sales under ousted President Hosni Mubarak, accusing officials of flouting rules that stipulate government land must be sold by a public auction.

He confirmed to Reuters a newspaper report on Monday that he would drop the claims and waive further litigation over Palm Hills and Kingdom.

In April, a court ruled in Fakharany's favour that the land sale to Palm Hills was illegal, sending shares of Egypt's second-biggest listed developer into a tailspin and forcing it to a first-quarter net loss.

The interim government had pledged to uphold the court's verdict but was now appealing against it, Fakharany said. He cited court documents that showed the government had filed an appeal against the decision to scrap the Palm Hills contract.

Government officials were not available to confirm the appeal.

'I know if I continue, I will win the appeal, but I will not fight for the rest of my life, continue spending money and running from one court room to another,' Fakharany said.

The cases have rocked confidence in Egypt's once-booming real estate sector and sent shares tumbling in firms such as Talaat Moustafa Group (TMG).

The real estate crisis deepened when a popular uprising toppled Mubarak and a widening anti-graft probe focused its attention on land deals that were seen as favouring networks of Mubarak's political allies and top businessmen.

'I want to expose this government, because it is still acting like governments that were toppled by the revolution,' Fakharany said. 'The government has to withdraw its appeal. This is completely unacceptable'

'This new government, brought to us by the revolution, wants to continue in helping developers steal the country and it wants to keep protecting corruption,' Fakharany said.

Fakharany said he was also thinking of dropping a challenge to a revised sale contract over land for Talaat Moustafa's landmark Madinaty project, the focus of the first land sale dispute that began last June.

A judicial panel advised a court last week to reject the latest challenge to the Madinaty deal.

'I don't care what that panel says. I will win this case, but the question is, is this revolutionary government just a new look for governments that preceded it?' Fakharany said, adding that if the government continues to take steps to 'shield corruption' he will drop that suit too.

He has taken no formal steps in any of the cases as yet.

Since Fakharany brought the case against TMG and Palm Hills, other copycat suits have been raised, including one challenging a land sale to Egyptian Resorts.

The challenge against the Kingdom Holding deal is for farmland for irrigation at Toshka in southern Egypt. – Reuters