The panel is aimed at formalising the succession in the event of a death of a king.

The system though will not take effect until Crown Prince Sultan, heir to King Abdullah, becomes king, a statement from the royal court said on Friday.

The committee will be made up of sons and grandsons of late King Abdul Aziz al-Saud, founder of modern Saudi Arabia and father of the current king and crown prince, said the statement signed by King Abdullah.

The step was taken in the "general interest", it said. It is part of an amendment of the Basic Law, the name given to the absolute monarchy's constitution.

The previous system gave the king full prerogative to name the crown prince although Western diplomats say such decisions are often debated within the royal circle.

Under the new system, the committee of princes, called the Allegiance Institution, will have a say in the appointment of a crown prince suggested by the king.

If the institution rejects the nominated crown prince, it may vote for one of three princes the king nominates for the title.

The appointment of the new crown prince will have to be done within 30 days of the accession of a new king, the statement added.