In 1953, Stalin died, and on the orders of the new Soviet leadership, Rákosi resigned as Prime Minister. The new prime minister was Imre Nagy, an agrarian specialist who had been expelled from the party leadership in 1949 for his opposition to the cooperative system. As a first step towards reform, he proclaimed amnesty and in October, as promised, he abolished the internment camps, ended the autonomy of the ÁVH, modified the system of subsidies for the light and food industries, reduced the burden on the peasantry, and implemented wage and price cuts. Living standards began to rise noticeably. In 1954, he introduced further reforms, including a more democratic public life. The Patriotic People”s Front was created with the aim of making it a free forum for opinion. The Petőfi Circle, which had long been banned, was reconstituted from among the left-wing intellectuals who supported the reforms and went on to gain considerable social influence.
However, there was no time to continue the reforms, as Rákosi and his supporters were waiting for the opportunity to rebuild. Their group was still in a strong position, with their people sitting in the state administration and party organisations, but for a time they dared not act against a prime minister who enjoyed Moscow”s support. Finally, in January 1955, Rákosi took advantage of the change in Soviet foreign policy following the accession of the FRG to NATO to have his rival summoned to Moscow, where Imre Nagy refused to criticise himself, to the general consternation of the public. Regardless, the March meeting of the party leadership censured the prime minister, who was stripped of all his posts in the spring and even had his membership of the Hungarian Workers” Party (MDP) terminated at the end of the year.
András Hegedüs, a supporter of Rákosi, became the new prime minister, but the public life – mainly the intellectual Petőfi Circle – and the internal opposition within the party that had been freed made it impossible to restore Stalinism in the country. Rákosi”s situation was also complicated by Khrushchev”s conciliation with Tito, which called into question the legitimacy of the Rajk trial, and by the XXth Congress of the USSR in February 1956”s condemnation of the Stalinist dictatorship. In March, Rákosi admitted that the case of László Rajk was based on provocation and laid all the blame on the arrested leaders of the ÁVH. In May, he had to admit that he had a role in the crimes, and tried to crush the resistance by banning the Petőfi Circle, but to no avail: Anastas Mikoyan, who arrived at the MDP leadership meeting, told Rákosi that he would have to resign as party secretary, which he did. He was succeeded by Ernő Gerő, who also followed the Stalinist line, so there was no substantial change.
In 1955, the Soviet Army withdrew from the areas of Austria it had occupied. The conclusion of the Austrian State Treaty and the subsequent evacuation raised hopes in Hungary that the Soviet invaders would soon withdraw, but this did not happen.
On 23 October, the first events took place in Debrecen: in the morning, thousands of Debrecen students gathered in front of the university. From there, chanting slogans and singing revolutionary songs, the students marched in rows of eight to the Party headquarters in the city centre to print the 20-point demand of the university youth. The party leadership held talks with the student delegation, and then János Görbe recited Sándor Petőfi”s poem In the Name of the People from the balcony of the building.