PRIME minister Ehud Barak secured the support of a rebellious coalition partner for his 2000 budget by agreeing to help bail out its debt-ridden religious schools.
The controversial move appeared to contradict Mr Barak's assertion earlier this year that he would not be "extorted" by groups with partisan interests.
Shas - Israel's third largest political party - is led by strictly orthodox Jews originating from Arab lands. It appeals to poor people with origins in the Middle East and North Africa and its growth has been driven by the mushrooming of its educational facilities.
Shas has been attracting children to its publicly funded, but legally independent, Source of Torah Educational Network of kindergartens and schools. These offer parents low fees, hot lunches and extra long days and give pupils a diet of religious orthodoxy.
Around 16,000 children attend the network's schools, and another 9,000 its kindergartens.
An escalating game of political brinkmanship between Shas and the education and finance ministries began soon after the May general election, when the party's entry into the Labour-led coalition was conditional on compliance with regulations in areas such as teacher qualifications.
By autumn, the network - which had apparently been operating way beyond ts means - could not pay teachers' salaries. In return for government aid, Shas removed the network's general director, suspected of fraud, and improved accounting procedures.
A top education ministry official claimed in August that nearly half the network schools had operated without state licences for the previous school year.
Shas has enjoyed immense freedom of manoeuvre over many years because of disproportionate clout in narrow coalition governments. The current left-wing education minister, Yossi Sarid, has tried to bring the network to order.
Anxious for the government to provide the millions needed to cover its schools' deficit, Shas delivered a strong message to Mr Barak last month when it abstained from a vote on the renewal of peace negotiations with Syria. Just before the end-of-the year budget vote deadline, the party announced it was quitting the coalition.
At the last moment, the education and finance ministries agreed to cover pound;7.6 million of the pound;12m debt, to raise funding for operating costs from pound;20m to pound;24.3m and to provide pound;45m over four years for building and renovations.
In return, Shas agreed to an increase in education ministry supervision. It was further agreed that network schools should have at least 20 children per class, and 150 per school.