An expanded panel of nine High Court justices, headed by Supreme Court President Dorit Beinisch, will handle a petition seeking to keep Israel from implementing a two-year budget, Beinisch said.

Judicial sources said yesterday that the decision to have an expanded panel shows the seriousness with which the court is treating the petition, which was filed by Kadima. They also said it indicates that the court could rule against a two-year budget.

In that case, the Finance Ministry will be required to submit a one-year budget instead, as it has done in the past.

"I derive great satisfaction from the fact that the court is treating with appropriate seriousness the petition that we filed," said former finance minister Roni Bar-On, who filed the petition in June on behalf of the Kadima Knesset faction. "At the same time, we have to be cautious and not put the cart before the horse. I hope the court ultimately adopts our arguments."

The draft budget, which was submitted to the Knesset yesterday, is the country's second two-year budget. The first was for 2009-2010.

Hearings on the case are expected in the coming weeks. At this point, the High Court of Justice is not barring the government from pursuing passage of the two-year budget, but the court could ultimately invalidate it. The Knesset plenum was expected to vote on the budget next week, and has not announced any change in plans.

The petition argues that a two-year budget would tip the balance of power in favor of the cabinet, at the expense of the Knesset, and would deprive the opposition of a "powerful tool," since Knesset members can topple the government if a majority votes against the budget.

The petition also cites a ruling by former justice Mishael Cheshin that the state budget should cover a single year only.

In the past, the Supreme Court has been highly critical of the Economic Arrangements Bill, supplementary legislation that is submitted with the budget, because it is on an expedited legislative track that does not give MKs the chance to study it in detail before they vote on it.

The petition contends that the two-year budget will be accompanied by a broader Economic Arrangements Bill containing provisions for two years instead of one and argues that it essentially requires the legislature to project all government spending and revenue three years in advance.

Finance Minister Yuval Steinitz said after the cabinet approved the two-year budget earlier this year that it allows the government to "present long-term plans, ensure economic stability and contribute to economic growth."

But Kadima says it doesn't make sense when the world economy is in flux, adding that the local economy is subject to fluctuation because of the constantly changing security situation. "The only other country that operates on a two-year budget," the petition states, "is Bahrain."

Prime Minister Benjamin Netanyahu has said that world bodies like the International Monetary Fund and the Organization for Economic Cooperation and Development favor a two-year budget.