Citing "difficult circumstances" and a change to the "general conditions" of his work, the resignation of Jordan's former EU ambassador will be seen as a major blow to the Mediterranean Union, a pet project of French President Nicolas Sarkozy.

Made up of the EU's 27 member states and 16 Mediterranean countries from north Africa, the Middle East and the Balkans, the union was launched in 2008 with the purpose of promoting stability and prosperity in the Mediterranean region.

The organisation and its Barcelona-based secretariat have been dogged by difficulties since the beginning, with a summit last year being cancelled due to disagreements between Israel and Arab countries.

Questions over financing, rather than internal disagreements, prompted Mr Masadeh to step down however, reports indicate. The Spanish news agency EFE said he had requested a budget of €14.5 million for his secretariat, but had not even received half that sum, with some northern EU states reluctant to commit funds to the southern-focused project.

With the fight against pollution in the Mediterranean and securing renewable energies among the main tasks on the organisation's agenda, its unwillingness or inability to tackle regional tensions has been noticeable.

The union's silence over the dramatic events in Tunisia and Egypt recently have prompted further existential questions over its role.

Protests continued for a second day on Wednesday in Cairo and other Egyptian cities after the ousting of Tunisia's former autocratic ruler, Zein al-Abidine Ben Ali, inspired calls for regime change in other north African countries and as far afield as Yemen.

The Egyptian government has said the protests are illegal, launching a crackdown and arresting some 700 people. Police beat protesters with batons and fired tear gas, reports say. In the eastern city of Suez protesters set fire to parts of a government building and attacked the headquarters of the ruling National Democratic Party.

Witnesses say the protests are unlikely to fade away, with more expected to join the crowds once the working week finishes on Thursday. "We've started and we won't stop," one demonstrator told AFP.

The unrest in the Maghreb has put a question mark over the EU's policy toward the area, with regimes such as Mr Ben Ali's in Tunisia having enjoyed the support of many southern EU states over the past decade.

Fears over a rise in Islamic extremism and desires to halt the inflow of African immigrants into Europe have led Spain, Italy and France to adopt a policy of co-operation with the region's autocrats, say NGOs.

On Monday, French President Nicolas Sarkozy admitted that his government misjudged the situation in Tunisia after originally offering to send forces to help Mr Ben Ali.

"Behind the emancipation of women, the drive for education and training, the economic dynamism, the emergence of a middle class – there was despair, a suffering, a sense of suffocation," Mr Sarkozy said. "We have to recognise that we underestimated this."