On Sunday Egyptians marked President Mohammed Morsi's first anniversary in office by protesting — mostly against him. By many accounts the protests were larger than those that led to the overthrow of the Mubarak regime; in the millions according to some reports.

There were multiple demonstrations in Cairo, including some for the President, as well as demonstrations (and in several cases violent clashes) in Alexandria, Assiut and Ismalia. It is also clear that it is not just Morsi but the Muslim Brotherhood as a whole that has been targeted, with the movement's national headquarters in Cairo attacked.

It is a perverse sort of achievement for Morsi. Not only has he inspired Egyptians to return to the streets, but if it is true that these protests were bigger than those that overthrew Mubarak, he has also provokedmany into turning out for the first time.

Some are demonstrating because they have never come to terms with the Brotherhood being in power, and never will. But the sheer size of the protests also exposes the hollowness of the President's claim that the demonstrators are simply remnants of the old regime. The protesters include those who were prepared to give Morsi the benefit of the doubt, but who lost faith in him as it became clear that the he was privileging his and the Muslim Brotherhood's narrow political interests over the consolidation of Egypt's transition to democracy. Indeed, it seems even some Egyptians who did vote for Morsi a year ago have taken to the streets.

So what does it all mean?

First, it is clear from the scale of the protests that Morsi and the Muslim Brotherhood cannot simply ignore them. But it is not clear what they can do to restore their lost legitimacy. It is probably past the point where they can adopt a more consensual and inclusive approach to the political transition. Few trust them anymore.

So does this mean that Morsi will be forced to resign, as some are predicting, or even that this is the end of the Brotherhood, at least politically? Maybe the former, but probably not the latter. The Brotherhood have walked a long and torturous road, literally for decades, to get to their current position of power. They will not give it up easily and they are capable of reassessment and reinvention.

Morsi and the Brotherhood may also be helped by the fact that it won't be easy for the opposition to turn these protests into a coherent set of political demands or even a viable political alternative. This is what helped the Brotherhood win the elections after Mubarak's ouster and it may yet help them again.

Second, the military obviously remains the critical determinant of the outcome. Crudely, they have two options: stay out, which would help Morsi to ride out the current crisis, with some adjustment and concessions, or intervene to force Morsi to resign, replacing him with something else, effectively re-booting the political transition. The military will not be keen to do the latter, however. They want to retain popular support, but they also don't want to manage the day-to-day running of the country again, even for a short period, as they did after Mubarak's ousting. The first instinct therefore will probably be to tell Morsi to 'fix this' even if they have no idea how. They will probably only take the second option if things become — or if the military feel they are about to become — so violent or disorderly that they have no choice but to act.

Third, while I don't believe predictions that this may result in a civil war, parts of Egypt will witness sectarian conflict and political violence that will be difficult to control (as in fact we are already seeing in places like Assiut). Egypt is not Syria, but it is clearly a deeply polarised society right now with no sign of any new political actor emerging that might reconcile these tensions.

Finally, there is a bigger question here about what conclusion Islamists will draw if the Brotherhood are forced from power, despite winning Egypt's presidential and parliamentary elections, more or less fairly. The more sober-minded will realise that the movement made many political errors and largely has itself to blame for its current predicament. The risk is, however, that others will draw less thoughtful conclusions, with violent consequences not only for Egypt but also elsewhere in an Arab world struggling to cope with new political realities.