The lawsuit block was one of several controversial measures tucked into the homeland security bill at the last minute last fall, and which nearly derailed the domestic defense package.

It would have prevented families who believe the preservative thimerosal is responsible for the spike in autism cases from filing lawsuits against manufacturers such as Eli Lilly and Co .

The agreement was brokered by Maine Republicans Olympia Snowe and Susan Collins, and Rhode Island Republican Lincoln Chafee, moderates angered by the insertion of the vaccine provision in the homeland bill.

The new Senate Majority leader Bill Frist, a Tennessee Republican, endorsed it, as did key Democrats who had vowed to make repeal of the lawsuit ban a top priority this year.

By working out the repeal language so early in his tenure, Frist avoided an ugly fight that could have overshadowed other legislative initiatives.

Democrat Debbie Stabenow of Michigan, who had drawn up her own repeal legislation and who attended a rally of dozens of families of autistic children in Washington earlier this week, called the agreement "a great victory."

Autism is a developmental disorder that makes it difficult for a person to interact with others. Young children with autism often do not talk normally and may appear to have difficulty hearing.

ENCOURAGING DRUG COMPANIES

Vaccine makers and health officials say the lawsuits are aimed at bypassing the Vaccine Injury Compensation Program, established to compensate any children injured by vaccines.

The idea is that vaccines do social good and society should shoulder any burden -- and also to encourage drug companies to make vaccines.

Lilly said the Homeland Security legislation only clarified this, and said it expected legislation would be passed later to reflect the controversial provisions.

"The vaccine ingredient provision only clarified that claims alleging injury due to vaccine ingredients are to be heard in the Vaccine Court established by the Vaccine Injury Compensation Program," the company said in a statement.

"It did not change in any way the underlying law or the way it is being interpreted by the courts."

The company expressed sympathy for children with autism and their families, but noted that despite many studies, no one has been able to find any evidence that thimerosol, or any vaccine, causes autism.

"There is no denying that autism is a devastating diagnosis for many families and Lilly expresses profound sympathy for these families. However, the lawsuits that have been filed against Lilly and other manufacturers are not supported by science," the company said.

The homeland bill passed only after leading Republicans promised to take another look at the controversial aspects early this year. "We've made good on our promise to revisit those provisions," said Frist, a surgeon.

He has backed a ban on thimerosal lawsuits as part of broader vaccine compensation reform.

The deal announced by Snowe and her colleagues addresses two other changes in the homeland measure. One will make it easier for colleges and universities to compete for research grants or contracts from the new homeland security department.

The other will bar most corporations who move offshore to avoid U.S. taxes from getting federal contracts, except when it is essential to national security.