Reuters

Canberra, Dec 5: Australia and New Zealand have been urged to put national rivalries aside and do what many say is unthinkable, merge to form a single nation.

A cross-party committee of Australian lawmakers said in a report that the Tasman Sea neighbours should consider legal and monetary union with a view to eventually becoming one country.

But New Zealand, one of the seven British colonies of Australasia until 1901 when Australia became an independent nation, ruled out rejoining the Australian fold.

''It won't be on our agenda 105 years later,'' New Zealand Prime Minister Helen Clark said today when asked about the Australian report.

Australia and New Zealand already have close economic links and citizens can move freely between each country without visas, but New Zealand's 4 million people have regularly rejected suggestions of a merger with Australia's 20 million population.

The idea of a union re-surfaced after the Australian government called for an inquiry into ways both countries could align their legal systems given the business and cultural ties between the two.

Committee Chair Peter Slipper said Australia now wanted a special panel set up to look at integration in the future, including monetary and national union.

Australian lawmakers acknowledged the hurdle posed by national pride, not to mention the problems any union would cause for rugby World Cup organisers who stood to lose a powerhouse participant in New Zealand's All Blacks.

''Progression to a unitary system of government in Australia, however desirable, might not be easy to achieve,'' the report of an Australian parliamentary committee said.