Thousands flocked to the square overnight after the cabinet offered its resignation to the military council.
At least 26 people have been killed and hundreds injured in three days of protests against the military rulers.
Amnesty International has criticised the military for failing to keep its promise to improve human rights.
Late on Monday some 20,000 people were estimated to have thronged Tahrir Square after the cabinet of Prime Minister Essam Sharaf announced its offer to resign.
Their numbers were far short of the hundreds of thousands whose demonstrations in the square earlier in the year led to the overthrow of Hosni Mubarak as president after 30 years in power.
But the square was again the scene of clashes between security forces and protesters determined to see the military transfer power to a civilian government.
A coalition of political groups has accused the military council of leading a "counter-revolution" and called for a mass demonstration on Tuesday.
Hundreds of people camped out in the square overnight.
The Supreme Council of the Armed Forces has not said whether it has accepted the cabinet's resignation.
A military source told there was no consensus among the council on whether to accept. The source said the council was also consulting with other political groups.
In a statement carried by the official Mena news agency, the council expressed its "deep regret for the victims in these painful incidents" and called for "the greatest degree of self-restraint".
On Monday evening, ambulances with sirens wailing were seen driving into the heart of the large city-centre square to ferry the injured to hospital.
The clashes began on Saturday following demonstrations against proposed constitutional changes unveiled by the interim government.
The military council produced a draft document setting out principles for a new constitution, under which the military and its budget could be exempted from civilian oversight.
A proposal by the military to delay the presidential election until late 2012 or early 2013 has further angered the opposition.
Protesters want the presidential vote to take place after parliamentary elections, which begin on 28 November and will be staggered over the next three months.
The unrest has cast uncertainty over the future of the elections but the military council has said they will go ahead.
Many people fear the military plans to hold on to the reins of power, whatever the outcome.
On Monday, protesters in Tahrir Square chanted "the people want the removal of the marshal" - a reference to Field Marshal Mohamed Tantawi, who heads the Supreme Council of the Armed Forces.
He has the task of overseeing the country's transition to democracy after three decades of autocratic rule under Mr Mubarak.
The ruling generals are the real focus of demonstrators' anger, says another BBC correspondent in Cairo, Yolande Knell. The interim cabinet is seen as having little power.
Monday saw further clashes between protesters and security forces, who fought running battles on the edges of the square and the nearby sidestreets leading to the interior ministry.
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