CAIRO, Dec 24 (Reuters) - Standard & Poors' cut Egypt's long-term credit rating on Monday and said another cut was possible if deepening political turbulence undermines efforts to prop up the economy and public finances.

Egypt's popular uprising two years ago chased away tourists and foreign investors, helping push its budget deficit into double digits as a percentage of national output and worsening its balance of payments.

A divisive battle over a new constitution this month has also prompted the government to delay urgent austerity measures and put a crucial $4.8 billion IMF loan on hold.

S&P reduced Egypt's long-term sovereign rating to 'B-' from 'B', but left its short-term rating at 'B' for both foreign- and local-currency debt. It kept its negative outlook on the rating - suggesting another cut is the most likely next move.

"A further downgrade is possible if a significant worsening of the domestic political situation results in a sharp deterioration of economic indicators such as foreign exchange reserves or the government's deficit," S&P said.

Domestic debt was equivalent to 69.7 percent of gross domestic product as of the end of September 2012, while its foreign debt was 13.1 percent of GDP, according to the finance ministry.

Egypt reached an initial accord with the International Monetary Fund (IMF) last month for a financial support package, but later put on hold a series of austerity measures deemed necessary to secure IMF approval.

The government then asked the IMF to delay until January a meeting to approve the loan, which looks increasingly vital to prop up government finances but requires it to take unpopular measures on taxation and spending.

The measures included increases in sales tax on goods and services ranging from alcoholic beverages, cigarettes and mobile phone calls to automobile licences and quarrying permits.

President Mohamed Mursi withdrew them within hours of their being announced after criticism from his opponents and the media.