Nigeria's National Assembly passed an amended 2008 budget on Wednesday after President Umaru Yar'Adua rejected a previous version because the lawmakers had approved some huge spending hikes.

Yar'Adua had returned the bill and asked the Senate and House of Representatives to reverse a 21 percent year-on-year increase they made in government spendings. The sharp increase had alarmed economists who fear inflationary pressures and doubt Nigeria has the capacity to usefully spend the money.

In the new version, the National Assembly has cut spending to 2.74 trillion from the 2.89 trillion naira it first approved.

"On the aggregate, we were able to reduce about 150 billion. The new figure appropriated is 2.748 trillion naira. Hopefully the new bill will be sent to the president tomorrow," Senate appropriations committee chairman Iyiola Omisore told reporters after Wednesday's session.

Omisore did not give details of the reductions and it was not clear if Yar'Adua will accept the new version and sign it into law, since the National Assembly's figure is still higher than the 2.45 trillion naira he originally proposed.

Yar'Adua's election in 2007 was upheld last month by a tribunal that rejected opposition complaints of vote-rigging and demands for a re-run. Some analysts say he is now better placed to take on the National Assembly and defend his far more prudent budget proposals.

One of the increases by the National Assembly included a 78 percent hike in its own recurrent expenditure. It also raised the capital budget of the National Sports Commission by 714 percent and gave the Police Service Commission a 662 hike and the Code of Conduct Bureau, a body involved in the government's anti-corruption campaign, a 998 percent increase.

Yar'Adua disagreed with the hikes and advised the National Assembly that the increase in its recurrent budget should not be more 20 percent, in a country where inflation was 8.6 percent year-on-year in January.

He also faulted an increase awarded to the Federal Road Maintenance Agency, which was allocated an extra 18 billion naira by the National Assembly.

The president had said the extra revenue that the National Assembly had added in the rejected version be channelled entirely into eliminating the budget deficit estimated at 2.5 percent of Nigeria's GDP.