An evicted elderly disabled woman, who has become symbolic of Spain’s housing crisis, will be able to return to her home in Madrid, according to her lawyer.

Maricarmen Abascal, 87, was forcibly removed on a stretcher from her apartment of more than 70 years on 23 September. She was admitted to hospital after the eviction.

Her eviction has led to widespread anger across Spain, which led Prime Minister Pedro Sánchez’s cabinet to agree on housing relief measures on Tuesday.

Abascal’s lawyer, Beatriz Duro, told a press conference there had been “goodwill from both parties” and that she would pay a similar amount of rent under a new contract, averting a significant price hike.

Duro had met the investment company Urbagestión, which owns the apartment, for several hours on Monday, and the agreement they reached still has to be approved by Maricarmen Abascal, as she was unable to take part in the meeting.

She added that Abascal, who is being treated for exhaustion, would sign the deal when she felt better.

Up to 1,000 protesters welcomed the agreement at Madrid’s Puerta del Sol, where hundreds of tents have been set up. However, the city’s Tenants’ Union had called on the government to approve deeper housing reforms “so that there are no more Maricarmens”.

The details of the government’s new housing agreement are expected to be released on Tuesday. It will need to be approved by parliament.

The tent protest has been criticised by Madrid regional leader Isabel Díaz Ayuso, who has accused the government of failing to respond in time to Spain’s housing shortage and of now coming up with “sectarian” and “deeply ideological” proposals.

“I’m merely asking to be told at what age I can stop paying my landlords so I can stay in my place, and maybe I’ll even join the next tenants’ protest,” she said.

Spain needed a million more homes to address demographic growth encouraged by the Sánchez government itself, she added.