The Liberal Democratic Party and the opposition camp continued negotiations Thursday over financial system stabilization bills, with the LDP showing signs it may compromise further.

Representatives of the Lower House's special committee on financial system stabilization failed to make any progress Thursday afternoon, the talks were expected to continue into the evening.

The LDP was expected Thursday night to compromise on an opposition camp proposal to create an entity tentatively called the Financial Restoration Committee that would be independent of the Finance Ministry and deal with bank failures, sources say. Other concessions may include measures to account for management responsibility at failed banks more strictly.

Should the LDP actually make such proposals, major momentum could be built for an otherwise stagnant negotiating session.

The creation of the committee, which would supervise the liquidation of failed banks, is one of the key elements of a scheme proposed by the three opposition parties -- the Democratic Party of Japan, Shinto Heiwa (New Peace Party) and the Liberal Party.

The other controversial issue is whether to abolish the financial stabilization law, which allows public funds to be injected into weak but solvent banks. The government and the LDP want to maintain the laws so that public funds can be injected into banks to strengthen their capital bases.