The Yugoslav parliament has ratified an accord to create a new, looser, union between Serbia and its junior federal partner Montenegro, and consign "Yugoslavia" to history.

The European Union-brokered accord was passed in the lower house of parliament by a vote of 74 to 23 - in the upper house, it passed with 23 votes against six.

The deal has already been approved by the individual parliaments of Serbia and Montenegro, the last remaining members of Yugoslavia.

The decision by the federal parliament clears the way for a commission to draw up a new constitution - and, providing agreement can be reached, to call elections later in the year.

Yugoslavia will then cease to exist, replaced by a new entity called Serbia and Montenegro.

Kept in the fold

The new arrangement is designed to mollify Montenegrins who want to declare full independence from Belgrade, while keeping the tiny republic within some sort of union.

The two partners will become semi-independent states, running their own economies, currencies and customs systems. However, they will continue to share the crucial defence and foreign ministries, as well as the federal presidency.

Hailed as a landmark accord, Montenegro has nonetheless reserved the right to take the issue of independence to a referendum after three years.

Before the agreement was reached, the leaders of the tiny republic had been planning to hold a referendum on independence this year.

Had that been held, and had Montenegro seceded from the federation, the EU feared that others in the region, like Albanian leaders in Kosovo and Macedonia, as well as Serbs in Bosnia, could have been encouraged to make similar moves towards independence - something the West is keen to avert.

The accord represents the latest dramatic alteration to the Yugoslav Federation, established by the Communist leader Josip Broz Tito in 1943.

Twelve years after his death in 1980, it began to unravel. Four republics declared independence during the 1990s, leaving just Montenegro and Serbia.

Slovenia and Macedonia managed to break away relatively peacefully, while declarations of independence in Bosnia and Croatia led to the worst violence and war crimes seen in Europe since World War II.