The tax panel of the ruling Liberal Democratic Party agreed Wednesday to propose radical tax breaks for housing loans for fiscal 1999, calling the allowance "the largest issue" in the government's efforts to stimulate the moribund economy.

But the LDP's Research Commission on the Tax System did not settle on specifics, such as whether to introduce a new income tax deduction system for interest payment on housing loans.

Housing-related tax cuts are the most controversial element of a comprehensive tax revisions package being prepared for the next fiscal year, which begins April 1. The revisions are expected to be released Wednesday.