March 17 (Reuters) - The Trump administration filed a

motion to extend two deadlines in U.S. Steel and Nippon

Steel's ( NISTF ) lawsuit against a U.S. national security panel

to give the government more time to wrap up merger talks with

the firms, a filing showed on Monday.

The filing is the clearest indication that U.S. President

Donald Trump may allow the deal, scuttled by his predecessor Joe

Biden, to proceed in some form.

In January, the two companies filed a lawsuit against the

Committee on Foreign Investment in the United States, which

scrutinizes foreign investments for national security risks,

after it recommended that a merger between them be rejected on

national security grounds.

The motion last week from the Department of Justice calls

for extending briefing deadlines in the CFIUS lawsuit for 21

days, and rescheduling the oral arguments for the week of May 12

from April 24.

"The requested extension will allow the government to

complete its ongoing discussions with the parties regarding the

U.S. Steel and Nippon Steel ( NISTF ) transaction with the goal of

eliminating the need for this Court's resolution of the

litigation on the merits," the DOJ said in its filing.

Trump in February said that he would not mind if Nippon

Steel ( NISTF ) took a minority stake in U.S. Steel.

Following his comment, a Japanese government spokesperson

said that Nippon Steel ( NISTF ) was considering proposing a bold change

in its previous approach of seeking to buy U.S. Steel.

Nippon Steel ( NISTF ) also tried to schedule a meeting between Vice

Chairman Takahiro Mori and U.S. Commerce Secretary Howard

Lutnick, according to a report in February.

However, no new deal has been inked yet.

In the lawsuit against CFIUS, the companies alleged that

Biden prejudiced the committee's decision and violated the

companies' right to a fair review.

They claimed that the then President did so to win the

favor of the United Steelworkers (USW) union in the swing state

of Pennsylvania, where U.S. Steel is headquartered, in a bid for

re-election.

U.S. Steel and Nippon Steel ( NISTF ) have consented to the motion,

but it still remains subject to court approval.