The European Parliament and member states are close to agreeing an Ecu14.95 billion budget for the EU's Fifth Framework Programme for research and development.

The figure includes the Ecu3.6 billion allocated to the Information Society Technologies (IST) programme. A decision is expected later this week.

Spain had earlier blocked agreement disputing a so-called 'guillotine' clause on review of funding in 2000.

"The guillotine clause has been a major problem. It says that if there is a new financial perspective [five year EU spending plan] in place, and it covers the amount agreed in the programme, then the programme proceeds as normal," said a parliament official.

"If not, all programmes come to a halt, and will not be implemented further until there is a decision on a new financial perspective. Spain wanted this clause as part of the agreement, but this was not acceptable," he said.

A revised agreement has been proposed, which will protect parliament's position and guarantees Spain's safety belt. The clause can only be applied with parliament's cooperation, and if there is a mid-term review. Spain has reacted positively to the proposals, Commission sources explained.

The midterm review would allow for an adaptation of the scientific and technological objectives, and their funding, halfway through the Fifth Framework Programme.

"From parliament's point of view, if we could get rid of the guillotine clause but keep the mid-term review, we will agree to a budget of around Ecu15 billion. Most member states are willing to go for this," the parliamentary source said.

An important element is that member states have made a proposal, which shows it is willing to negotiate, and people are slightly more optimistic, said an aide to European science, research and development commissioner Edith Cresson.

Other Commission sources have indicated that a bargain will be struck at Strasbourg, when parliament meets next week.

"Member states are still discussing the new compromise package, which has been approved by parliament. The situation looks hopeful for Strasbourg - no one has thought of the next step in case an agreement is not reached," said a commission official.

The Ecu3.6 billion IST programme includes funding for cooperative projects between industry players and university researchers and will cover latest computer hardware, software and telecomms research and development.