After an emergency meeting on Saturday, the Supreme Judicial Council urged Morsi to retract the decree, which they call an "unprecedented assault on the independence of the judiciary and its rulings."
The council is packed with judges appointed by former President Hosni Mubarak. It regulates judicial promotions and is chaired by the head of the Court of Cassation.
On the streets, anger continued Saturday over a decision announced Thursday by the Islamist president to grant himself sweeping new powers. Egyptian security forces fired tear gas to disperse protesters in the capital Cairo.
The latest unrest follows clashes on Friday between supporters and opponents of Morsi, in the worst violence since he took office last June.
Critics accused Morsi of seizing dictatorial powers with his decrees, which make him immune to judicial oversight and give him authority to take any steps against "threats to the revolution."
The president said he wanted to root out what he called "weevils eating away at the nation of Egypt."
Demonstrators had pitched tents in Tahrir Square on Saturday, the focal point of the popular uprising nearly two years ago which toppled Hosni Mubarak's authoritarian regime.
He removed on Thursday the country's longtime attorney general, widely seen as a Mubarak holdover, who did not effectively pursue the many cases against former regime officials accused of corruption, and ordered the retrial of former officials if new evidence against them is brought forth.
The ousted attorney general, Abdel Maguid Mahmoud, appeared before a gathering of Egyptian judges on Saturday — his first public appearance since Morsi's decree. He was greeted by raucous applauseand cries of "Illegitimate! Illegitimate!" in reference to the president's decision. He read out a statement saying judicial authorities are looking into the legality of the president's decision to remove him.

'We do not want to have an Iranian system'

Morsi's edicts have turned months of growing polarization into an open battle between his Muslim Brotherhood and liberals who fear a new dictatorship.
Protesters run for cover after riot police launch tear gas canisters in Cairo on Friday.Protesters run for cover after riot police launch tear gas canisters in Cairo on Friday. (Ahmed Mahmoud/AFP/Getty)
Some in the opposition, which has been divided and weakened, have been speaking of a sustained street campaign against the man who nearly five months ago became Egypt's first freely elected president.
Morsi and the Brotherhood contend that supporters of the old regime are holding up progress toward democracy.
They have focused on the judiciary, which many Egyptians see as too much under the sway of Mubarak-era judges and prosecutors and which has shaken up the political process several times with its rulings, including by dissolving the lower house of parliament, which the Brotherhood led.
His edicts effectively shut down the judiciary's ability to do so again.
At the same time, the courts were the only civilian branch of government with a degree of independence: Morsi already holds not only executive power but also legislative authority, since there is no parliament.''
A small protest gathered outside the main courthouse on Saturday with demonstrators denouncing the president and chanting "Leave, leave." Police fired tear gas to disperse a crowd of young men who were shooting flares.
"We do not want to have an Iranian system here," said Ahmed Badrawy, a labour ministry employee protesting at the courthousereferring to fears that hardcore Islamists may try to turn Egypt into a theocracy.
Morsi's move came at a time when he was enjoying lavish praise from US President Barack Obama and Secretary of State Hillary Rodham Clinton for brokering a cease-fire between Israel and Gaza's Hamas rulers on Wednesday.
In his decrees, Morsi ruled that any decisions and laws he has declared or will declare are immune to appeal in the courts and cannot be overturned or halted.
He also barred the judiciary from dissolving the upper house of parliament or the assembly writing the new constitution, both of which are dominated by the Brotherhood and other Islamists.
The edicts would be in effect until a new constitution is approved and parliamentary elections are held, which are not expected until the spring.