A government-sponsored bill that waters down the postal privatization reforms pushed through by then Prime Minister Junichiro Koizumi cleared the Lower House on Thursday, which may allow the government to retain control of the banking, mail and insurance juggernaut for years to come.

The bill, jointly submitted by the ruling Democratic Party of Japan and main opposition forces the Liberal Democratic Party of Japan and New Komeito, would scrap the deadline for the government's divestiture from what was called the world's largest bank and possibly let the bank and postal insurance units stay together under the Japan Post group.

The bill was immediately sent to the Upper House, which is expected to enact it by the end of the Diet session, which ends in June.

The revision bill stipulates that the government should sell all of its Japan Post Bank and Japan Post Insurance shares under Japan Post Holdings "as early as possible." Under current law, the government is required to sell them by 2017, although the deadline has been temporarily "frozen" by a DPJ amendment that was passed in 2009.

Three LDP members, including Shinjiro Koizumi, a son of the former prime minister, voted against the bill.

"I don't think the revision will enable (Japan Post) to fully use the active energy of privatization," Koizumi said.

The two others who backed him were former aides to the ex-prime minister, who purged the party of those who opposed postal reform by kicking them off the LDP ticket in the 2005 Lower House election. They are former Secretary General Hidenao Nakagawa and Yoshihide Suga, a former internal affairs minister.

The LDP is likely to punish the three lawmakers. Party rules oblige all LDP members to vote for a bill collectively approved by the party. "I'm ready to face the punishment," Koizumi said.

The legislation would also restructure the Japan Post Group into a four-company system from five, merging Japan Post Service Co. and Japan Post Network Co., and require post offices to provide universal postal, banking and insurance services across Japan.

Under the revision bill, profits from the sale of two-thirds of the shares of Japan Post Holdings, estimated to be worth over ¥6 trillion, would be used to help reconstruct the Tohoku region.