Kibbutz Ha'On, situated east of Lake Kinneret, will stop operating as a kibbutz and will be turned into a semi-cooperative community, or moshav, the Kibbutz Movement newspaper "The Green Paper" reported Thursday.

The paper also said that the move was approved following a governmental decision to help implement a creditors' deal for the kibbutz.

The kibbutz is NIS 50 million in debt. According to the creditors' deal, the 37-family kibbutz will return their land to the state, making 280 land plots available to the public. Kibbutz members will receive ownership of their houses - which will also be renovated - and members of retirement age will receive a pension payment of NIS 2,400 a month.

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In addition, the kibbutz will sell its businesses - a vacation resort and a gas station - and in return their debts to different creditors will be cleared.

The government approved the status change of the kibbutz this week, in spite of the Kibbutz Movement's opposition to the move. "The preferable conditions that the state grants to moshavim from time to time are part of a policy that was intended to entice kibbutzim and their members to turn into a moshav," said the secretary-general of the movement.

Uzi Keren, the prime minister's adviser on settlement affairs, said that only the Kibbutzim Ayelet HaShachar and Beit HaEmek expressed interest in turning into semi-cooperative moshavim.

Last week, Pope Benedict said he was surprised with the status of kibbutzim in Israel. In a meeting in the Vatican with Ze'ev Shor, the secretary-general of the Kibbutz Movement, the Pope said that he knows the kibbutzim are nearing their 100th anniversary of existence, and aren't what they used to be. The Pope said that the communities are less cooperative than they were in the past.