TOKYO, March 26 (Reuters) - Japan's government on

Tuesday relaxed military equipment export restrictions, the

second change in less than four months, to allow future overseas

sales of an advanced jet fighter it is developing with Britain

and Italy.

The rule change applies only to Cabinet-approved jet fighter

exports and will be limited to countries - currently 15 - that

have defence equipment transfer agreements with Tokyo committing

them to settle international disputes peacefully in accordance

with the United Nations charter, the government said.

Exports to countries involved in conflicts will remain off

limits, it added.

Although limited in scope, the change, which comes after

months of political wrangling between the ruling Liberal

Democratic Party and coalition partner Komeito, represents the

biggest shift in Japan's military export policy in a decade,

removing a potential obstacle that could have disrupted the jet

fighter programme.

Under that Global Combat Air Programme (GCAP), Japan,

Britain and Italy last year established a joint organisation and

industry group led by Britain's BAE Systems PLC,

Japan's Mitsubishi Heavy Industries ( MHVYF ) and Italy's

Leonardo to develop and deploy the advanced fighter by

the middle of the next decade.

Any Japanese export ban that halted overseas sales and

limited production numbers could have made the aircraft

unaffordable because development expenses would have to be

spread across a smaller fleet.

The rule change is nonetheless controversial in Japan

because the country still adheres to a war-renouncing

constitution adopted after its defeat in World War Two.

It also comes after Japanese Prime Minister Fumio Kishida's

government in December made a separate export rule tweak to

permit the transfer of defence equipment built under licence to

the countries holding the designs. It will allow Japan to ship

Patriot air-defence missiles to the U.S.