Saudi Arabia's King Fahd has granted wider powers to the country's consultative council, the Shura.
The Shura is hand-picked by Saudi Arabia's absolute rulers
King Fahd issued a decree empowering the council to propose new laws without seeking his permission first.
Correspondents say the move will speed up the decision-making process in the conservative Islamic kingdom.
The Saudi Government has been under pressure to introduce political and economic reforms, and recently faced rare demonstrations calling for change.
Until now, the 120-member Shura, which is hand-picked by King Fahd, has acted as an advisory body, without the power to initiate legislation.
Under the decree, the council will be able to propose new laws or amendments and have more power in disputes with the cabinet.
"It's a step in the right direction, " said Abdulaziz al-Orayer, a member of the Shura's economics committee.
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"It means we can comment on their [the cabinet's] comment."
Earlier this month, the Saudi Government decided to begin broadcasting the council's weekly sessions, which had not previously been televised or open to the public.
Saudi Arabia's rulers have recently come under increasing domestic and international pressure to introduce political reforms.
In October, hundreds of people were arrested after staging civil rights demonstrations in several Saudi cities.
US President George W Bush also called on Saudi Arabia to give its people "a greater role in their society", in a speech in early November.
Saudi authorities, meanwhile, announced that the country will hold its first ever elections - for municipal councils - within a year.