Prime Minister Shinzo Abe moved closer to easing constitutional curbs that have kept Japan's military from fighting abroad since World War Two after the ruling party's dovish coalition partner agreed to consider a compromise proposal.
An agreement would be a big step toward achieving Abe's goal of loosening the limits of the post-war, pacifist constitution.
The New Komeito, the junior party in Abe's ruling bloc, is wary of a dropping a ban on sending Japan's military to aid a friendly nation under attack, but on Friday party officials agreed to consider a proposal that would allow the change while theoretically limiting cases in which it could be implemented.
"I want to discuss this thoroughly within the party," New Komeito deputy chief Kazuo Kitagawa told reporters after the latest round of talks, at which his ruling Liberal Democratic Party counterpart Masahiko Komura submitted the new proposal.
The United States and some Southeast Asian countries would welcome the change, which would mark a major shift in Japan's post-war security policy. Japan's military has never engaged in combat since its defeat in World War Two.
But rival China, locked in bitter disputes with Japan over territory and wartime history, would almost certainly criticise it as a sign that Tokyo, rather than Beijing, is ramping up regional tensions.
Pressure has been mounting on New Komeito from Abe, whose drive to loosen the constraints of the U.S.-drafted, post-war constitution is central to his conservative agenda. Conservatives say the charter's war-renouncing Article 9 has hindered Japan's ability to defend itself as a sovereign nation.
Advocates of a new interpretation also argue the change is vital to cope with security threats including from an increasingly assertive China and a volatile North Korea.
New Komeito leaders had ruled out leaving the coalition over the proposed change, which critics say would gut Article 9.
"While furthering debate and deepening the people's understanding, I want to ... aim at an agreement," New Komeito leader Natsuo Yamaguchi told a parliamentary panel, Kyodo news agency said. Yamaguchi has been among the most cautious New Komeito lawmakers toward the change.
Successive governments have said Japan has the right to so-called collective self-defence under international law, but that exercising that right exceeds the bounds of the constitution.
Surveys have shown many voters oppose changing that interpretation, but that even more are confused.
With opposition parties in disarray and the economy likely to rebound from a slowdown after an April sales tax hike, Abe's popularity may not suffer much, if at all.
"He is the Teflon leader," said Jeffrey Kingston, director of Asia studies at Temple University's Japan campus.
"There's no opposition so he can ride roughshod. The New Komeito was the only fly in the ointment."
Komura's latest proposal would allow the exercise of force in cases where an attack on another country threatens Japan's existence and fundamentally undermines the people's right to life, liberty and the pursuit of happiness - a de facto recognition of the right to exercise collective self-defence.
It would also limit the use of force to the "minimum necessary" for defence and to cases where there was no appropriate alternative.
Some in the LDP worry the proposal would be too restrictive, but New Komeito, backed by a Buddhist lay group that has opposed the change in policy, wants to narrow the scope.
Experts say that once the basic principle is recognised, the scope of implementation can be expanded later.
Abe had been pushing to encapsulate the change in policy in a cabinet resolution before parliament breaks on June 22 but media said that timetable had been pushed back to early July.
(Writing and additional reporting by Linda Sieg; Editing by Jeremy Laurence)