A ruling party panel examining measures to bolster the sagging stock market plans to seek a legal amendment that would allow companies to buy back shares up to an amount equivalent to their earned surplus, a senior official of the panel said Thursday.

The Liberal Democratic Party commission wants the amendment made by the end of March, he said.

The Justice Ministry, however, wants to prepare legal amendments to submit to the Diet in the fall that would lift curbs on companies buying back their own shares and holding them as treasury stock.

The LDP panel also plans to ask the LDP's tax council to meet and work out measures to revise the taxation of securities, the official said.

The LDP stock panel agreed last week to seek the removal of legal curbs on treasury stock.

Under the Commercial Code, firms are only allowed to buy back their shares for certain purposes -- usually to feed stock option schemes or to cancel shares.

Politicians and companies are hoping that by lifting the legal curb they can jack up share prices, as it will lead to a reduction in the number of shares available in the market.