UPDATE 1-Philippine court offers compromise on graft probe

(Recasts with Supreme Court offer)

By Manny Mogato

MANILA, March 4 (Reuters) - The Philippine Supreme Court gave senators 24 hours on Tuesday to accept a deal that would see a top government official resume testimony in a Senate probe into suspected corruption that has rocked the government.

As part of the deal Romulo Neri, a former economic planning chief, could continue to decline to answer questions seeking to link President Gloria Macapagal Arroyo to alleged kickbacks in a $329 million government telecoms contract with China's ZTE Corp (0763.HK: Quote, Profile, Research).

Senators would be able to petition the Supreme Court to rule on whether Neri's use of executive privilege to keep his conversations with Arroyo confidential was correct.

Senators have already asked the Supreme Court to lift the executive order but oral arguments on the case only started on Tuesday and a decision is not expected this month.

Agreeing to the compromise could see Neri, who was moved to an education post last year, being questioned as to how the telecoms deal was done.

It would also take some heat off Arroyo, who has come under pressure from the powerful Catholic Church and former government officials, to lift restrictions on information about the deal.

"We have all agreed to consult our colleagues," Senator Manuel Roxas told reporters.