The group said on Wednesday that it hoped the truce, due to start on Friday, would drive forward its desire for Basques to be recognised as a people, while Spain's Socialist government said it hoped the ceasefire would be "the beginning of the end".

A ceasefire would be the first step in a long-awaited peace process with Eta, which has been blamed for killing 850 people since 1968 in its fight to carve an independent state out of northern Spain and southwestern France.

Eta, which is classed as a terrorist group by the United States and the European Union, previously declared a full ceasefire in September 1998, but rescinded it in December 1999.

Three Eta members appeared on state television to announce the new truce, dressed in black berets and white hoods covering their faces.

They sat at a table in front of Eta's flag showing a snake twisted around an axe.

"Eta has decided to declare a permanent ceasefire from March 24, 2006," said a woman seated in the middle, reading from a statement.

"The object of this decision is to drive the democratic process in the Basque country in order to construct a new framework in which our rights as a people will be recognised and to ensure the future development of all political options."

Support lost

Eta has been weakened in recent years by a police crackdown with hundreds of arrests in France and Spain.

"The government has the duty to be extremely prudent, you can't be cautious enough ... It is our desire and our wish that this will be the beginning of the end"

Maria Teresa Fernandez de la Vega, Spanish deputy prime minister

Eta also lost support after the 2004 Madrid train bombings, when Spaniards recoiled in horror at the deaths of 191 people.

Eta, Western Europe's most active separatist group, has threatened and blackmailed thousands of Basque businesses in its fight for independence. Its last fatal attack was in 2003.

A ceasefire could open the way to talks with Spain's Socialist government, which is far more inclined to cede more power to Spain's regions than the previous conservative government.

Maria Teresa Fernandez de la Vega, the deputy prime minister, said: "It is a very good piece of news for all Spaniards," said  as national television broke its regular programming to provide wall-to-wall coverage of the ceasefire.

"The government has the duty to be extremely prudent, you can't be cautious enough ... It is our desire and our wish that this will be the beginning of the end."