City leaders in Sao Paulo say they are reversing a hike in bus and subway fares which has sparked widespread protests across Brazil.
Sao Paulo mayor Fernando Haddad and state governor Geraldo Alckmin said at a joint news conference that the fare increase has been abandoned.
It is not yet clear what impact the U-turn will have on the street protests that have broken out in several Brazilian cities. The demonstrations have evolved into communal outcries that have moved well beyond the original demand that public transportation fares be lowered.
Tens of thousands of Brazilians flooded the streets of the country's biggest cities to express their long-standing complaint about being weighed down by high costs and a system of government infected with corruption.
Mass protests have mushroomed across Brazil since demonstrations called last week by a group angry over the high cost of a woeful public transport system and the 10% rise in bus and subway fares in Sao Paulo, Rio and elsewhere. The local governments in at least five cities have agreed to reverse the rises.
Demonstrators mainly are expressing deep anger and discontentment - not just with the ruling government, but with the entire governing system. A common chant at the rallies has been "No parties!"
The protests have brought troubling questions about security in the country, which is playing host this week to football's Confederations Cup and will welcome Pope Francis in July for a visit to Rio de Janeiro and rural Sao Paulo.
Brazil's media has scrambled to cover the sprawling protests - coverage that in some cases raised the ire of protesters, in particular that of the powerful Globo TV network. Whenever what appears to be a Globo helicopter swoops over a demonstration, protesters hiss, raise their fists and chant slogans against the network for what they say was its failure to widely show images of a violent police crackdown on protesters last week in Sao Paulo.
Brazilian demonstrations in recent years generally had tended to attract small numbers of politicised participants, but the latest mobilisations have united huge crowds around a central complaint: the government provides woeful public services even as the economy is modernising and growing.
The Brazilian Tax Planning Institute think-tank found that the country's tax burden in 2011 stood at 36% of gross domestic product, ranking it 12th among the 30 countries with the world's highest tax burdens. Yet public services such as schools are in sorry shape. The Organisation for Economic Co-operation and Development found in a 2009 educational survey that literacy and maths skills of Brazilian 15-year-olds ranked 53rd out of 65 countries, behind nations such as Bulgaria, Mexico, Turkey, Trinidad and Tobago and Romania. de Janeiro.