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The Liberal Democratic Party on Tuesday backed down from its crusade to block a package of bills on postal services deregulation, saying it would approve the legislation’s submission to the Diet.

Key LDP panels declined to fully endorse the contents of the bills, however, and vowed to take countermeasures via debate within the party and the legislature.

The decision marks the first time that the LDP has decided to allow the government to submit legislation to the Diet before approving its contents. LDP policy decisions are traditionally made by Policy Research Council divisions and approved by the Executive Council before Cabinet endorsement is sought.

The Executive Council is seeking to smother any intraparty squabbling that could hurt the party in key elections slated for Sunday, according to council members.

The government will formally adopt the bills at a Cabinet meeting Friday and submit them to the current Diet session, government officials said.

“This is a battle over whether the LDP will crush the Koizumi Cabinet or the Koizumi Cabinet will crush the LDP,” Prime Minister Junichiro Koizumi told reporters, voicing determination to pass the legislation.

While Koizumi strongly endorses the bills, the LDP is sharply divided over whether private firms should be allowed to enter the mail services sector.

“We have approved the submission, but we won’t make any concession on the contents of the bills,” Hiroyuki Arai, head of the LDP panel on postal services issues, told reporters after the panel meeting.

Meanwhile, Hiromu Nonaka, an LDP heavyweight who is backed by post office chiefs across the nation, said, “We still have to thoroughly discuss the bills as there are points still pending.”

The legislation in question features a bill that would allow private firms to offer mail services.

The package would mandate the establishment of a new public corporation to take over the running of the three postal services — mail, postal savings and “Kampo” life insurance — from the government in 2003.

Many LDP members have voiced concern that the quality of postal services might deteriorate should private firms be allowed to enter the industry.

On Thursday, Koizumi told Katayama to submit the four bills to the Diet before the Golden Week holiday period, which runs from late April to early May.

However, some LDP members responded by saying that the bills should not be submitted at such short notice, citing “unresolved issues” and a need to see details of related ministerial decrees.

The privatization of postal services is a highly political issue as several lawmakers in both the ruling and opposition blocs garner votes via lobbying from post office chiefs or postal union members.

Executive Council members stressed that the postal services legislation constitutes an exceptional case.

They said they would adhere to the LDP’s usual policymaking procedures for future bills in order to maintain their control over the policymaking process.

“To ensure a smooth passage in the Diet, it is not favorable to skip this process,” said Mitsuo Horiuchi, chairman of the executive council.

LDP Secretary General Taku Yamasaki also stressed that the move was “provisional and exceptional.”

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