UPDATE 1-Egypt satirist faces probe for insulting president
* Satirist rose to fame after uprising that toppled Mubarak
* Case raises concern about freedom of speech
* Paper says editor to be questioned after presidency complaint (Adds case against newspaper)
By Tom Perry
CAIRO, Jan 1 (Reuters) - An Egyptian satirist who made fun of President Mohamed Mursi on television will be investigated by prosecutors following an accusation that he undermined the leader's standing, a judicial source said on Tuesday.
Bassem Youssef's case will increase worries about freedom of speech in the post-Hosni Mubarak era, especially when the country's new constitution includes provisions criticised by rights activists for, among other things, forbidding insults.
In a separate case that fuels concern about press freedom, one of Egypt's leading independent newspapers said it was being investigated by the prosecutor following a complaint from the presidency, which accused it of publishing false news.
Youssef rose to fame following the uprising that swept Mubarak from power in February 2011 with a satirical online programme that was compared with Jon Stewart's Daily Show.
He has since had his own show on Egyptian television and mocked Mursi's repeated use of the word "love" in his speeches by starting one of his programmes with a love song, holding a red pillow with the president's face printed on it.
The prosecutor general ordered an investigation into a formal complaint against Youssef by an Islamist lawyer. The complaint accuses him of "insulting" Mursi, an Islamist backed by the Muslim Brotherhood, and "undermining his standing".
Human rights activists say it is the latest in a series of criminal defamation cases that bode ill for free speech as Egypt reshapes its institutions after Mubarak was toppled.
"The greatest threat to freedom of expression over the last four months has been this rise in criminal defamation cases, whether it is on charges of defaming the president or the judiciary," said Heba Morayef, Egypt director of the New York-based Human Rights Watch.
"The problem is now is we are likely to see an increase in this because criminal defamation is now embedded in the constitution."
Rivals accuse Mursi, who won Egypt's first freely contested leadership election in June, of polarising society by foisting a divisive, Islamist-leaning constitution on the country.
In the case against the independent daily al-Masry al-Youm, the presidency accused the paper of "spreading false news representing a danger to civil peace, public security and affecting the presidency", the paper said.
The article in question was a report on Saturday on the paper's website which cited "informed sources" saying Mursi was due to visit hospital, without giving a reason for the trip, al-Masry al-Youm said in an online account of the case against it.
The presidency denied Mursi was due to visit hospital. The paper said it had updated its initial story to say the president's visit had been cancelled and instead his wife had gone to the hospital to visit a family member.
Al-Masry Al-Youm said one of its editors had been summoned by the prosecutor for questioning next Saturday.
(Editing by Alison Williams)