Diplomats said Myanmar agreed on Tuesday to forgo its scheduled chairmanship of the 10-member Association of Southeast Asian Nations (Asean) next year, to avoid a damaging Western boycott of the group's meetings.
"We agreed that once Myanmar is ready to take its turn to be the Asean chair, it can do so," Laos Foreign Minister Somsavat Lengsavada said on Tuesday in Vientiane, reading out a joint Asean statement.
Myanmar - formerly known as Burma - wanted to focus its full attention on its efforts at national reconciliation and restoring democracy after more than four decades of military rule, the statement added.
"We expressed our sincere appreciation to the government of Myanmar for not allowing its national preoccupation to affect Asean solidarity and cohesiveness," Somsavat said, adding that 2006 would be a "critical year".
The Philippines, the next in line for a role which rotates alphabetically, will become chairman instead.
The 10-member Asean had been under pressure to deny Myanmar the chairmanship.
Critical of the military government, the US and European Union had demanded that Myanmar either move towards democracy and release pro-democracy campaigner and Nobel laureate Aung San Suu Kyi, or forfeit its turn at heading up Asean in late 2006.
"We expressed our sincere appreciation to the government of Myanmar for not allowing its national preoccupation to affect Asean solidarity and cohesiveness"
Laos foreign minister
The day before the Asean meeting in Vientiane, British Foreign office minister Ian Pearson repeated threats of US and European boycotts of Asean meetings in 2006 if Myanmar's generals took up the reins.
"Clearly it would be, I think, very difficult not just for the UK but for the EU and for other countries to deal with Asean if Burma was to hold the chair under the current circumstances," Pearson said in Cambodia.
Asean, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines, has been trying to persuade Yangon to pursue political reforms through a "constructive engagement" policy.
Europe and the US have favoured sanctions in an attempt to restore multi-party civilian government.
Neither approach seems to have made any headway.