President Megawati has ruled out independence

The government hopes the new law will help end nearly 40 years of separatist fighting in the province, which lies on the western half of New Guinea island.

Under the bill, the name of the province will officially change to Papua.

President Megawati Sukarnoputri is expected to sign the bill into law later this month.

From next year, the province will be able to keep 80% of revenues from logging and fishing, and 70% from the mining of oil and natural gas reserves.

The world's largest copper and gold mine, the Grasberg mine, is located in the province.

New powers

Energy giant BP is also setting up a huge natural gas project in the west of the province - expected to become one of the world's largest.

The new law will also allow the province to fly its own independence flag and use its own anthem.

It also provides for a people's council to protect the rights of indigenous inhabitants.

"We hope that with these changes acts of violence will stop," said Sabam Sirait, head of the special commission that prepared the bill.

The rebel Free Papua Movement has been battling Indonesian rule since Jakarta annexed the province in 1963. It has rejected the new bill, saying people want a fully independent state of West Papua.

President Megawati has said she will never allow that to happen, although she has apologised to Irian Jaya, and to the restive province of Aceh, for human rights abuses committed by past Indonesian governments.

Her government has already granted extra autonomy to Aceh. But that has not stopped separatist violence there.