The cabinet approved the 2007 state budget late Tuesday by an unexpected majority vote of 19 to four, with a single abstention from Labor Party Chairman and Defense Minister Amir Peretz.

Despite earlier threats by Labor ministers to torpedo the vote over the treasury's plan to delay scheduled updates to minimum wage, all of the party's ministers, with the exception of Peretz, voted in favor of the budget.

The budget was opposed only by the four ministers from Shas.

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During the meeting, the government decided to postpone the final stage in a plan to increase minimum wage until the next fiscal year, Army Radio reported.

However, the government also decided to increase the addition to the minimum wage; under the new plan, workers will be awarded NIS 140 more per month, instead of NIS 125.

In an act of defiance, Peretz, who was one of the great supporters of the plan to increase minimum wage, refused to enter the room ahead of the vote. He told reporters the planned delay is a "blatant violation" of coalition agreements.

Labor MKs dismissed the minister's actions, saying he is merely struggling to survive politically. The minister has recently come under harsh criticism, along with other political leaders and the army's top brass, for their decisions and conduct during the Lebanon war.

The Labor MKs said the minister was stirring up a fight over "nonsense."

"We have, in fact, succeeded in passing a fantastic budget," the MKs said, adding that even a finance minister from within the Labor party would probably not have been as forthcoming as the current Treasury has been.

Education Minister Yuli Tamir decided to support the budget after the government agreed to add dozens of millions of shekels to the education system. A substantial amount of money was added to fund repairs and support needed for schools in the north that have been hard-hit by Hezbollah rocket fire.

The new budget has changed at an overall cost of another NIS 800 million. Nonetheless, the current plan does not exceed the guidelines specified for the budget ahead of the vote.

Late on Tuesday, Likud MKs called the approval of the state budget anti-social. The party issued a statement saying that the "so-called defenders of the weaker classes have approved a budget full of terrible decrees."

Meretz Chairman Yossi Beilin also criticized the government saying Olmert and Peretz "were slamming the door" on the social agenda.

A non-profit organization, which specializes in helping families with socio-economic problems also voiced its criticism shortly after the vote. "The harm the government has caused to the weakest echelons of society is made possible by their dependence on non-profit organizations. The state cannot rely on charity, it must build a long-term plan with a suitable budget," an activist said.