Cheers erupted and fireworks were let off as reports that toppled president Hosni Mubarak was pronounced "clinically dead" trickled into Tahrir Square.

"After 30 years of a brutal regime, the people wanted to say yes, they won for just a day, of course they are rejoicing" says Kawsar Abdel-Atti, 40, a house wife form Sharabaya who had taken her six children to Cairo's flashpoint square earlier that evening to "celebrate Mohamed Morsi's win."

"Large crowds also left the square as they felt sad that an old man had died – we're Egyptians, it doesn't matter who it is, we feel bad if someone dies," her eldest son, Ahmed Abdel-Atti, a 19-year-old computer science student added.

Others, however, believed there were darker state intentions behind the decision to release this breaking piece of news, particularly when reports began circulating that the imprisoned leader was in fact not dead.

General Said Abbas, a member of the ruling military council, told Reuters that the imprisoned former president had suffered a stroke but added: "Any talk of him being clinically dead is nonsense."

Another military source said: "He is completely unconscious. He is using artificial respiration."

A member of the military council, General Mamdouh Shaheen, then told CNN: "He is not clinically dead as reported, but his health is deteriorating and he is in critical condition."

The celebrations quickly fizzled out when banned presidential contender Hazem Abu-Ismail took to the stage "to tell people to quieten down as it's a lie" adds Ahmed.

"The military just wanted to make big news that would eclipse the Tahrir protests about the ruling military council, the elections and the amended constitution," Mohammed Tarek, 27, an interior designer said, "It worked; the media suddenly started talking about Mubarak, and people started to leave the square."

Sabri, a 43-year-old music instructor, who boycotted the elections but was in Tahrir Square to protest the constitutional addendum, said he thought it was a government-spread rumour. Notably, he added, as the first news of Mubarak's 'so-called' death came from government news agency MENA.

"The ruling military council is playing games with us – just like they did with the trial," Sabri says.

"For example they cleared Mubarak and his sons of corruption charges, even though here in Egypt we have lost so much money: money is exactly what we need more than anything else, as it decides your dignity and destiny. Of course the SCAF would protect him; Tantawi got his money from the same pocket. The state believes that we are swallowing the lies they feed us, but we're not."

Morsi-supporter Samir Amin Ibrahim, 30, said the news of Mubarak's "death" worried him as he felt it was part of a military-organised plan. "It is like everything is scheduled to ensure the revolution is killed, first the parliament is dissolved, then Shafiq is allowed to run for the presidency, then the SCAF's constitutional declaration and now Mubarak dead, just when we take to the streets in big numbers."

However, he added that if Mubarak had died, people would be still be unhappy, despite ousting the former president "we don't rejoice in death."

Some, like shoe seller Ashraf Mohamed Youssef, 36, thought that it is an elaborate ruse to ensure that Mubarak is moved out of Tora Prison and into the comfortable surroundings of the Maadi Military Hospital. Mubarak, who had served just 18 days of his life sentence, initially refused to enter Tora Prison after being found guilty on the 2 June of participating in the crime of killing protesters during last year's popular uprising.

Previously he had been living in the luxury of the International Medical Centre, which, allegedly, had gardens, a swimming pool and a helicopter pad.

Youssef worries that Mubarak's death will garner support for the 84-year-old autocrat "people will feel for sorry for him, he's an old sick man, we are human after all."