The Philippines government will push for the creation of a federal Islamic state in the country's troubled south as part of efforts to forge a peace agreement with Muslim separatist rebels, an official said Wednesday.

Jesus Dureza, presidential adviser on peace talks with insurgent groups in the Philippines, said the government will seek amendments to the country's constitution to allow the establishment of 'a federal Bangsamoro (Muslim nation) governance unit.'

The creation of the federal Islamic state will pave the way for the expansion of the existing autonomous Muslim region in the strife-torn region of Mindanao, which is a key issue in peace talks with the Moro Islamic Liberation Front (MILF).

Dureza said President Gloria Macapagal Arroyo and the cabinet have approved the plan to push for a charter change last December after the MILF walked out of a scheduled meeting in Kuala Lumpur due to disagreements over the key issue.

The government and MILF panels were supposed to have signed an agreement on the expansion of the Autonomous Region in Muslim Mindanao, but the rebel negotiators thumbed down the document because it would have required constitutional processes.

'There is already an agreement in the cabinet that this is the way forward,' Dureza told reporters in a forum, referring to the creation of a federal Islamic state through constitutional amendments.

Dureza said his office was already drafting proposed amendments to be presented to Arroyo and the cabinet for approval within the month.

The MILF, the largest Muslim separatist rebel group in the southern Philippines, has been waging the secessionist struggle since 1978.