Egypt’s president seems to have gained the upper hand over the country’s military by dismissing the top generals and by seizing back powers that the military seized from the office, although the implications of the move remain to be seen.

Mohamed Morsi, who is backed by the Muslim Brotherhood even though he formally left the movement before he took office on 30 June, has been locked in a power struggle with the military.

The Supreme Council of the Armed Forces had governed Egypt in the wake of the revolution which ousted Hosni Mubarak last year, and the military appeared reluctant to hand over power completely. Days before Mr Morsi’s inauguration, it decreed constitutional amendments which significantly weakened the president’s powers, giving themselves control over the budget and over the process of drafting a new constitution.

But Mr Morsi seems to have capitalised on an embarrassing security breach – an attack which saw militants kill 16 soldiers in the Sinai – to assert his authority. On Sunday, he ordered the resignation of Field Marshal Mohamed Hussein Tantawi as defence minister and of army chief of staff Sami Anan, and restored the powers taken from his office.

He also announced that if the 100-member panel drafting the constitution did not conclude its work, he would appoint a new one within 15 days.

The president’s decisions have several implications, and it remains to be seen whether they would go unchallenged. The two ousted generals have been appointed as advisers to the president and awarded Egypt’s highest state honour in an apparent attempt to get them on board.

Mr Morsi’s decisions also seem to have been negotiated with several senior generals, which may reduce the likelihood of a challenge but which could also mean that the power struggle between the military and the president is far from over.

Effectively, Egypt has been under military rule since 1952 – Mubarak had led the air force before leading the country, for instance. The military runs a vast economic empire which accounts for roughly 25% of the country’s GDP, heavily reducing its dependence on the government.

It has also enjoyed a strong base of support, although accusations of human rights violations and other abuses of power during the post-Mubarak transition have tainted its image, and possibly made Mr Morsi’s move more likely to happen.

But despite its dented reputation, the military is seen as a secular counterpoint to the Muslim Brotherhood, whose growing influence has been viewed with concern, particularly by Egypt’s sizeable Coptic Christian minority.

The more liberal-minded activists who had been at the forefront of last year’s revolution, meanwhile, tend to be sceptical of both the military and of the Muslim Brotherhood, and may fear that the transition will simply be from a secular authoritarian state to an Islamic one.

In any case, the situation as it stood – with ultimate power shared by two distinct entities – was probably untenable. As senior Muslim Brotherhood member Saad Emara put it, “this had to be settled in favour of one authority. The boat with two captains sinks”.

The issue now, it seems, is what direction the boat will be taking.