Czech and Slovak leaders agreed early Saturday to split Czechoslovakia into two, ending a 74-year-old federation of their two peoples.

Czech leader Vaclav Klaus and Vladimir Meciar, the most powerful man in the Slovak lands, said their regional parliaments would make the final arrangements for the country's future - leaving the slightest possibility that Czechoslovakia would survive.But both made clear that three years after the "Velvet Revolution," the "Velvet Divorce" was inevitable.

Meciar said his Movement for a Democratic Slovakia would have preferred an extremely loose Czech and Slovak confederation of two sovereign states.

The Czechs demanded a complete split into independent states unless the Slovaks would agree to keep a federation with a strong central government, officials involved in the talks said.

The two regional parliaments have been instructed to reach agreement by Sept. 30 on the future of the federation of 16 million people, founded in 1918 from the ruins of the Austro-Hungarian empire.

The Slovak side had said previously it wanted a referendum on independence early next year, which would have postponed the federation's collapse until the end of 1993.

But the wealthier Czechs, eager to quickly transform their republic into a thriving capitalist state, feared the delay of the negotiations would only hamper their integration with the West.

Klaus, victor in June 5-6 elections in the Czech lands, told reporters "a referendum is not impossible but also not obligatory" under the separation plan the two sides have agreed upon.

Experts from both sides spent Thursday working out details for a caretaker federal government to oversee the divorce. It isn't clear yet who will head the government.

Klaus told reporters the Czechoslovak federal Parliament would have to approve any deal reached by the two regional legislatures. But he spoke as if the separation already were reality.

"The federal government understands its mandate as temporary," he said. "The federal government is willing if asked to prepare conditions for smooth functioning of two independent states."

He said that the federal government would stop redistributing the budget to the Czech lands and Slovakia by 1993. By then, the two states would meet their own financial needs, he added.

The new federal government will have 10 members instead of the present 16, Klaus said. The present 13 ministries would be streamlined to five - defense, finance, exterior, interior and economics, he said.

Slovakia, the poorer eastern third of the federation, has been hit hardest by ambitious reforms initiated by Klaus, who has been President Vaclav Havel's finance minister.

Havel, a dissident playwright, was elected president following the 1989 "Velvet Revolution" that swept out the Communists after four decades in power.

The "Velvet Divorce," as officials have dubbed the split, is likely to be costly for both sides, but more so for the Slovaks. Slovakia has so far received only a fraction of the Western investment in Czechoslovakia since the fall of communism in 1989.

Joblessness in Slovakia, officially at nearly 12 percent, is almost four times the rate in the Czech lands.

A vision of philosopher Tomas Masaryk, Czechoslovakia was created out of the ashes of the Austro-Hungarian empire after World War I. It always has been a strained relationship, though the differences were muted under Communist rule.

The legacy of the 10.5 million Czechs bears the strong influence of Austria and Germany. The strongly Roman Catholic Slovaks were dominated by Hungary and denied any form of national identity through the centuries.