The Union Cabinet, which met here for over two hours on Thursday, has decided to urge President KR Narayanan to promulgate an ordinance in this regard. It, sources said, was in the process of being fine tuned by the Government and was likely to be sent to Rashtrapati Bhawan sometime next week.

The ordinance follows a direction issued last year by the Supreme Court in the sensational hawala case. In keeping with its orders, the United Front Government had subsequently set up an internal review committee.

The committee, in its report, had recommended that the CVC be converted into a statutory body. It would mean that the chief vigilance commissioner would, once the ordinance comes into force, be appointed by the President and not by the Prime Minister as has been the practice till now.

Any changes in the CVC can, under such circumstances, be effected only by amending the statute and not by any executive order.

The CVC was set up in 1968 on the recommendation of Santhanam Committee report, which suggested ways to check corruption in public offices.

The SC had approved a proposal of the Department of Personnel (DoP) making the CVC a multi-member body on the lines of the Election Commission with statutory powers. It had also directed that both the CBI and ED chiefs be appointed by a panel headed by the CVC which would monitor the functioning of these crucial departments, thereby conferring a degree of autonomy on them.

As per the DoP's proposal, the CVC is to be appointed by a panel consisting of the Vice-President, the Prime Minister, the Home Minister and the Leader of the Opposition.

Once the CVC is in place, the Government can proceed with the appointment of new heads for the CBI and the ED as recommended by the DoP.

The SC had also directed that the post of ED be upgraded from Joint Secretary to Special Secretary. A notification to this effect is expected shortly.

Since the necessary bills were not placed before Parliament in the just concluded budget session, the Government has had to resort to an ordinance to give effect to the SC directions.

Prime Minister AB Vajpayee and Home Minister LK Advani had discussed the ordinance with Leader of Opposition Sharad Pawar on Sunday and secured his approval.

The post of CVC has been lying vacant since last week after the previous incumbent, SV Giri, demitted office at the end of a three-month notice period. Giri had resigned soon after the SC order as the Government refused to specify his role despite repeated pleas.

Official sources said, the urgency for an ordinance is not only because the post of CVC is vacant, but there is also a question mark over the tenure of the present CBI Director, Trinath Mishra. The Government has been forced to act without delay because with the transfer of ED Director MK Bezbaruah last week, the Directorate remains headless as the appointment can only be done by a panel headed by the CVC.

The ED is looking after several sensitive FERA cases involving politicians. As a result of the delay in the appointment of the CVC, recruitment and transfers in both the ED and the CBI had been stalled.