The Knesset passed a bill limiting the Economic Arrangements Law in a preliminary reading on Wednesday.

The bill, which was introduced by Labor MK Orit Noked, would prevent the government from including clauses in the Economic Arrangements Law that are not directly linked to the state budget.

The bill would also prevent the government from including economic reforms in the Economic Arrangements Law, unless the reforms are being unreasonably delayed by the Knesset.

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The government agreed to support the bill, on the condition that further legislative proceedings will be coordinated with the government.

"This is the first step on the path to fundamental changes in the legislative process and a genuine strengthening of the Knesset,? said Noked.

"This bill would balance between the authority of the administrative branch and the legislative branch and would bring about a situation in which the laws including in the Economic Arangements Law would be laws that are necessary for passage of the budget," added Noked.

The Economic Arrangements Law, which accompanies the state budget, has in the past served the government in enacting a number of structural economic reforms that would not necessarily have received Knesset approval on their own, while also preventing the implementation of many laws passed by the Knesset.

The Supreme Court as well as several attorneys general and social organizations have criticized the Economic Arrangements Law and other similar legislation, arguing they hurt the democratic process as well as the balance of power between the Knesset and the government.

The criticism has focused on the fact that the concentration of many clauses on unrelated issues in the Economic Arrangements Law prevents MKs from properly considering the legislation they are voting on.

Should the bill be passed in the second and third readings, it will take effect immediately and impact the 2007 Economic Arrangements Law.

The government decided to support Noked's bill in order to secure her support for the 2007 state budget and Economic Arrangements Law.

Noked, an outspoken Labor party rebel, voted against the 2006 state budget.