• President Dilma Rousseff (left) prepares to swear in her predecessor, former president Luiz Inacio Lula da Silva, as her new chief of staff, in Brasilia, Brazil, on Thursday. Picture: EPA/FERNANDO BIZERRA JR

  • Anticorruption protesters fill the centre of Sao Paulo, Brazil, on Thursday. Picture: EPA/SEBASTIAO MOREIRA

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BRASILIA— Leftist leader Luiz Inacio Lula da Silva was sworn in as President Dilma Rousseff’s chief of staff on Thursday amid a deepening political crisis as protests against his appointment continued for a second day and a judge sought to block the move.

Soon after the swearing-in ceremony, the federal judge in Brasilia issued an injunction to suspend the appointment on the grounds it prevented "the free exercise of justice".

Prosecutors have charged Mr Lula with money laundering and fraud as part of a sweeping graft probe centred on state oil company Petrobras. The former president’s appointment as a minister would provide him immunity from prosecution by all but the Supreme Court.

The government can appeal the injunction in a higher court but the judge’s move could raise tensions that are already running high between the executive and the judiciary.

During the swearing-in ceremony, Ms Rousseff strongly criticised the release on Wednesday of a taped telephone conversation between she and Mr Lula that was made public by another federal judge, calling it illegal and antidemocratic.

"Convulsing Brazilian society with lies, with reprehensible practices violates constitutional rights and as well as the rights of citizens," said Ms Rousseff, who is herself facing mounting pressure to resign.

Mr Lula’s supporters clashed briefly with opponents of his Workers’ Party outside the presidential palace before the ceremony. Police said they used pepper spray to stop it and move away about 300 opposition protesters.

Hundreds of antigovernment protesters calling for Ms Rousseff’s impeachment and Mr Lula’s arrest also blocked the central Avenue Paulista in Sao Paulo, Brazil’s largest city and economic hub, for a second day.

An impeachment process against Ms Rousseff was expected to kick off in Congress on Thursday, with the nomination of the commission expected to hear the proceedings in the lower house. Centred on an unrelated allegation of irregularities in the government budget accounting, the impeachment proceedings have become a test of the political strength of Ms Rousseff’s government and the mood on the streets.

Government supporters hope the return of Mr Lula will help to reunite a fragmented coalition before the impeachment process reaches a vote.

Brazil’s currency and stock market gained sharply on Thursday. Investors hope the fall of Ms Rousseff’s left-leaning government would usher in more market-friendly policies.

With Brazil’s economy mired in its worst recession in a generation, popular anger at Ms Rousseff is growing as the wide, long-running investigation into bribes and political kickbacks at Petrobras taints her inner circle.

The corruption scandal has divided her governing coalition and moved her main partner, the PMDB party, closer to breaking with her government.

Vice-President Michel Temer, leader of the PMDB, did not attend the swearing in of Mr Lula, his aides said, because Ms Rousseff appointed a party legislator, Mauro Lopes, as civil aviation minister even though a party convention on Saturday banned its members from taking new posts in her government.

Mr Lula and Ms Rousseff have denied any wrongdoing.

Reuters