Leaders of the government and the ruling coalition parties effectively agreed Friday that policy-related spending in the fiscal 2001 budget should at least be as expansionary as this year's 48 trillion yen, to help achieve a full-fledged economic recovery.

In deciding basic policy on guidelines for budget requests, they also agreed to set aside 700 billion yen for Prime Minister Yoshiro Mori to distribute to information technology and other priority projects that help with environmental protection, urban infrastructure and the aging of society.

They decided to allow ministries and government agencies to submit an unlimited number of requests for chunks of the 300 billion yen allocated for various public works projects. These allocations will be examined by the ruling coalition parties.

All guidelines will be approved by the Cabinet on Tuesday. All budget requests must be filed by the end of August, except for 150 billion yen set aside to adjust for the planned realignment of ministries and agencies in January.

The two special allocations -- worth a total of 1 trillion yen -- are intended to secure political latitude from vertically divided government ministries and agencies. The amount is 200 billion yen larger than this year's.

Other parts of the general-account budget will be screened by the Finance Ministry.

The leaders agreed that spending on public works -- including the 300 billion yen special allocation -- should be as large as the 9.43 trillion yen in this fiscal year's initial budget.

Government spending on sectors other than public works projects should expand by 200 billion yen on this year's allocation, and natural increases in social security costs and personnel costs will also be covered in the new budget, they agreed.

These factors alone mean general expenditures will be slightly larger than this year's budget. The exact amount is not known yet because other factors may help to reduce the total budget.

Most budget requests will be allowed to come in about twice the size of the planned budget. There is no upper limit only in the 300 billion yen allocation.

Finance Minister Kiichi Miyazawa said earlier in the day that setting no upper limit for budget requests is "a venture" for his ministry, because budget screening will be a daunting task.

"If we fail, we can't have a budget," Miyazawa said in a news conference, adding, "Nothing ventured, nothing gained."