The ruling Liberal Democratic Party's powerful tax policy panel decided Wednesday to scrap plans to raise taxes on cigarettes and low-malt "happoshu" in fiscal 2002, LDP officials said.

The decision by the LDP's Tax System Research Commission reverses a decision the day before by the LDP and its two coalition partners.

On Tuesday, the LDP, New Komeito and the New Conservative Party gave informal approval to raising the cigarette tax from 7 yen to 9 yen per cigarette in April.