WASHINGTON DC -- A legislative sword that threatens to shut down the US Naval Air Station within months will be withdrawn, a top US Congressman said last night.

Mr. Ron Dellumns, chairman of the House Armed Services Committee, said he would kill a clause in the 1994 Defence Spending Bill that would have cut off funding for the US Base three months after it passed.

The decision was made after Premier the Hon. Sir John Swan urged Mr. Dellumns to reconsider the clause which would impose "an unreasonable burden'' on the Island.

"Your point is reasonable,'' Mr. Dellumns told the Premier outside the House of Representatives. "It makes sense and we'll work to resolve it.

"It is not my desire to adversely affect you in this precipitous way.'' A few hours later, after a meeting with Congressman Norman Zsifky of Virginia, Mr. Dellumns passed on word that he would make sure the 90-day clause was withdrawn from bill FY94.

"I'm very pleased,'' the Premier said. "We've had an impact. This won't make the problem of the US Base closure go away, but it shows these people are beginning to understand our situation.'' Mr. Dellumns' decision marked the end of an extraordinary day in which the Premier lobbied for consideration of Bermuda's vital interest in the event of US military withdrawal from Bermuda.

US leaders, both on Capitol Hill and at the Pentagon, signalled their readiness to work with the Island.

But the most significant message the Premier heard was that his re-election was critical for any conclusive handling of the US Base issue.

Senior Congressman Charles Rose, a long-time Bermuda ally, said the Premier needed a fresh mandate.

Washington, he said, was nervous about committing to negotiations with a leader facing an imminent election.

"Get your mandate and we can solve the problem,'' said Mr. Rose, whose North Carolina district includes Camp Lejeune where the Bermuda Regiment trains.

"Everything is on hold until you get the election over with. Then get back here and we can sit down and work this thing out.'' Mr. Rose said the Premier's allies in Washington were ready to work out a "phased'' solution to the US base issue for "minimum economic impact'' on the Island.

The no-nonsense political advice marked the first time Bermuda's domestic political agenda was raised as a factor in the US base issue.

Sir John later said the Congressman's advice was "something I will have to consider when making a final decision on an election date. But I'm not prepared to say anything further on that at this time''.

Yesterday's meetings saw Sir John continue to sow arguments for easing the impact of any US withdrawal from the Island.

Mr. John Dalton, new Secretary of the Navy, said he was prepared to work with Bermuda to avoid abrupt closure such as threatened by bill FY94. And he pledged to talk with Bermuda before anything is done with the Base.

"I think he understands the problem we're facing,'' Sir John said. "He has an appreciation of the impact any hasty closure would have.'' The Premier passed on NATO's opinion that an Atlantic Ocean military base was desirable and that Bermuda was ready to cooperate in any shared arrangement for the Base.

Bermuda given breathing space The Secretary said the Navy had not yet concluded what it wants to do with the Base.

Congressman Robert Torricelli of New Jersey, chairman of the House Foreign Affairs Committee on the western hemisphere, said he would work to protect Bermuda's interest on bill FY94 which still must go before a Senate/House conference for final drafting.

He also said he would call the Secretary of the Navy at an appropriate time to discuss the Base issue.

Although the threat of immediate Base closure appeared to be removed last night, sources within Bermuda's delegation said nothing could be taken for granted.

They particularly cautioned that Bermuda's interests could be overlooked in the legislative horse-trading that occurs during Senate/House conferences.

Later, Mr. Torricelli echoed Congressman Rose in saying that the Bermuda election was the only significant piece of the puzzle not in place.

"We've established enough of a base here that when an election is over we can start to work on this thing,'' he said. "Sir John's roots are so deep here that we are in a good position to deal with it.

"We wanted to make sure that members of Congress and the Pentagon are aware of the problem so that when the Premier gets back here we can get this thing solved.'' Bermuda-based US reinsurers are facing a new tax-hike threat in the US Congress.

A private bill has been introduced that will increase the excise tax on foreign reinsurance to four percent from one percent.

Congressman Charles Rangle, the third-ranking Democrat in the House and a member of the powerful Ways and Means Committee told The Royal Gazette yesterday that the bill was a threat to Bermuda's reinsurance industry but that he did not think that it would go anywhere.

"It's always a threat when someone introduces a bill,'' he said. "But the question is with its severe impact on the people of Bermuda versus the benefits received from increased revenues.''