The country is already enduring the bloodiest internal conflict in its modern history as the army, which deposed Mohamed Mursi on July 3 after huge protests against him, cracks down on the Muslim Brotherhood.
Mr Mubarak, 85, was arrested after a popular uprising overthrew him in February 11, 2011, as unrest spread across the Arab world and appeared in a court-room cage during his trial on charges that ranged from corruption to complicity in the murder of protesters.
More than a year on, the only legal grounds for Mr Mubarak's continued detention rest on another corruption case which his lawyer, Fareed el-Deeb, said would be settled swiftly.
The lawyer said: "All we have left is a simple administrative procedure that should take no more than 48 hours. He should be freed by the end of the week."
Without confirming that Mr Mubarak would be freed, a judicial source said the former leader would spend another two weeks behind bars before the authorities made a final decision in the outstanding case against him.
Mr Mubarak, along with his Interior Minister, was convicted and sentenced to life in prison last year for failing to stop the killing of protesters in the revolt that swept him from power.
He still faces a retrial in that case after appeals from the prosecution and defence, but this would not necessarily require him to stay in jail. Mr Mubarak did not appear at a hearing in the case on Saturday and was also absent from yesterday's proceedings.
He is being held at Tora prison on the southern outskirts of Cairo, the same facility where senior Brotherhood members have been detained in a clampdown that followed Mr Mursi's removal.
Mr Mubarak's eventual release could stir more political tension in Egypt, where at least 850 people, including 70 policemen and soldiers, have been killed since the army-backed government forcibly dispersed Brotherhood sit-ins in Cairo on Wednesday.
In separate violence yesterday, suspected Islamist militants killed at least 24 policemen on the Sinai peninsula. Three policemen were also wounded in the grenade and machine gun attack near the north Sinai town of Rafah on the border with Israel.
At least 36 Islamists died in government custody on Sunday, in an incident the Brotherhood described as murder and the authorities said was a thwarted jailbreak.
The Interior Ministry said 36 Brotherhood detainees had been suffocated by tear gas during an attempted prison breakout near Cairo.
Egypt's upheaval is causing global jitters, but no consensus on how to respond has emerged in the West or the Arab world.
A senior EU official said the US, Europe and Gulf Arab states had only limited influence on the generals now calling the shots in Egypt.
Egyptian Foreign Minister Nabil Fahmy sought to pre-empt any attempt to use aid flows as a lever by saying he would look at all such assistance to see "what aid is being used to pressure Egypt and whether this aid has good intentions and credibility".
Meanwhile, dozens of churches and other Christian properties have been looted in recent days.