BEIJING, Oct. 27 (Xinhua) -- China's lawmakers are again debating a controversial law on the protection of private property as they struggle with a concept that experts say "could undermine the legal foundation of China's socialist system."

    The latest draft makes "the protection of state, collective, and private property" the main principle of legislation.

    The nearly 200 legislators attending the current session of the Standing Committee of the National People's Congress are debating the law for the sixth time. No previous law has ever had more than five readings.

    The committee members are debating adding clauses to the law that will prevent fraudulent acquisitions and mergers of state assets.

    "People who (fraudulently) create losses of state assets through restructuring, acquisition, or insider trading will be responsible at law," says the sixth version of the bill, which was submitted to the country's top legislature for debate on Friday.

    It is another move by the bill's drafters to highlight the protection of state property in the wake of strong calls from the public to turn the vice on corrupt officials and businessmen who connive to take over state assets for their own benefit under cover of "business deals."

    The 45-page draft also protects individual rights to bank accounts, earned profits and residential property.

    "The property bill should reflect the actual economic situation in China with the focus on solving urgent economic development needs," said Hu Kangsheng, deputy director of the Law Committee of the National People's Congress.

    "We should learn from foreign experiences on drafting similar laws, but should not blindly copy them," Hu told the Standing Committee of the National People's Congress on Friday.

    The bill was first submitted to the legislature in 2002 and has already been through a rare fifth reading. It was withdrawn from the NPC's full session last March amid worries that the law, the country's first to protect private ownership, could undermine China's socialist system if the rights of individuals superceded the state's right to care for the collective good.

    Opposition faded after drafters revised the fifth version, debated last August, which put state ownership rights at the heart of the economic system.

    "The biggest problem is that corrupt government officials conspire with businessmen to prey on state assets in the process of restructuring and merging," said Huang Shuhe, deputy director of the State-owned Assets Supervision and Administration Commission.

    Huang cited a recent case in western Shaanxi Province, where the state-owned Shaanxi Crops Group was acquired by a relatively small private firm. Within a year, the group's net profits slumped from 117 million yuan (14.6 million U.S. dollars) to a loss of 333million yuan.

    Among other major revisions, the latest version scraps a clause that would have allowed farmers with stable income to mortgage the rights to use their farmland. Some lawmakers had suggested that the state allow farmers to take out mortgages of this kind.

    "After consulting with several central government departments, the law committee consider the conditions for allowing this kind of mortgage are not ripe," Hu said.

    The new draft contains stricter clauses on preventing farmland being converted into construction sites and requires that land for factories, business, tourism, recreation, and residential housing be put out to public tender.

    Sources with the legislature said the bill would probably be reviewed one more time before the NPC Standing Committee votes on it at a full NPC session next March.