Prime Minister Keizo Obuchi ended a crisis in his ruling coalition on Friday, striking an accord with Liberal Party leader Ichiro Ozawa to resolve a dispute over the proposed cutting of Lower House seats that had pushed their eight-month-old alliance to the brink of collapse.

The leaders agreed that debate on a bill to cut 50 Lower House seats will be carried over to the next Diet session, and the two parties will try to carry out the seat reduction in time for the next Lower House election, which must be held before October 2000. The next extraordinary Diet session is expected to convene in October.

The accord came on the final day of the 207-day extended regular Diet session, during which the coalition government achieved most of its legislative goals.

In a news conference later in the day, Obuchi said he will not dissolve the Lower House for a general election until the seat-reduction legislation is enacted. "Without the reduction of Lower House seats, I don't think we can gain the understanding of the people," Obuchi said.

Obuchi also referred to the possibility of merging his Liberal Democratic Party with Ozawa's Liberal Party, although he said it is a matter to be decided by members of the two parties.

"First of all, we should cooperate in the next election. If members of the two parties agree to such a direction, it would be an issue to be considered in the future," Obuchi told reporters.

Ozawa and many other Liberal Party members bolted from the LDP in 1993, and now several LDP lawmakers think the two parties should be reunited to create a more powerful conservative force.

Until Friday, the secretaries general and Diet affairs chiefs of the LDP, the Liberal Party and New Komeito continued negotiations to resolve their differences over the Diet seat cuts.

Following Friday's agreement, Ozawa confirmed that the Liberal Party, which had threatened to pull out of the coalition if the bill was not put to a vote before the Diet session ended, will stay in the LDP-led bloc and participate in three-way policy talks with the LDP and New Komeito.

Obuchi also met with New Komeito leader Takenori Kanzaki later in the day to convey the accord with Ozawa. New Komeito, which strongly opposes the Liberal-proposed seat-cut bill, plans to join the ruling coalition.

The proposed reduction of 50 proportional representation seats was part of the LDP-Liberal Party agreement before the two parties launched their coalition government in January.

However, due to adamant opposition from New Komeito, which the LDP hopes to include in the coalition, the bill had taken a back seat to other issues since it was submitted to the Lower House nearly two months ago.

Deliberations on the bill at the special committee level only began late Wednesday.

During the Friday morning talks with Ozawa, Obuchi reportedly said the LDP and Liberal Party should cooperate to enact the seat-cut bill at the beginning of the next Diet session and try to carry out the cuts in time for the next general election.

Ozawa said he expects Obuchi to show leadership in dealing with the bill and added the Liberal Party will also make efforts to realize it.

Obuchi also urged Ozawa's support for launching tripartite policy negotiations as early as possible to form a new coalition government involving New Komeito, the second-largest opposition party.

"I told the prime minister that the policy agreement is a prerequisite for a new coalition government," Ozawa told reporters. "If we aim to forge the coalition with New Komeito, we should thoroughly conduct policy talks."

At a news conference after his meeting with Obuchi, Ozawa appeared satisfied with the LDP's decision to get the bill passed before the next general election.

"The agreement is not a perfect one, but I can confirm that the two parties' agreement will be realized in the next Diet session, and we accept it for now," Ozawa said.

The issue will be on the agenda of the three parties' policy negotiations planned later this month, he added, but noted sharing common views over key issues such as social welfare, economic and fiscal policy, security and defense, and education will be more important.

During the session that ended Friday, the Diet enacted 166 bills, including policy agreements between the LDP and the Liberal Party. Ozawa praised such policy achievements as a step toward reforming Japan.

Once the three parties reach a policy agreement, Obuchi is expected to reshuffle his Cabinet to include New Komeito members.

Meanwhile, the Lower House Special Committee on Political Ethics and Election Law put the matter to a vote at the committee session Friday and formally approved that debate on the bills be carried over to the next session.

The committee also decided that debate on a bill aimed at giving permanent non-Japanese residents the right to vote in local elections, which is under deliberation at the same committee, will also continue in the next session.

New Komeito has been pushing for the bill's passage.