STOCKHOLM (Reuters) — Paid leave for parents in Sweden, already the envy of the world, is likely to become even more generous and flexible in a government effort to reverse a worrying decline in the birth rate.

Parents will have an extra month of paid leave for each child, bringing the total to 13 months, under proposals expected to be approved by the government Dec. 7 and by Parliament by the end of the year.

Employers have rejected the proposals as unnecessary and unworkable but, with every family a winner, the single-chamber Riksdag (Parliament) is considered sure to approve the measures.

Fathers will have to take at least two of the 13 months instead of one at present.

Parents will be able to take their time off in single hours if they wish, allowing, for instance, a mother to start work one hour late after taking a child to kindergarten.

The Social Democratic-led government of Prime Minister Goran Persson wants to introduce the changes in stages over 12 months. The estimated $100 million additional cost will be funded by the government from the existing employment tax on firms.

Persson has expressed concern about the steady decline in the number of births in the last decade from a peak of 123,938 in 1990 to 88,172 in 1999, the lowest figure since 1935.

Sweden's fertility rate, the number of children each woman has on average, fell to 1.5 in 1999 from 2.14 in 1990 but is still above the European Union average of 1.4.

"Unless we can change this trend our welfare system will face serious strains," Persson's party said in a statement. "Fewer and fewer people of working age will face the task of financing hospitals and care services for more and more elderly," it warned.

The employers' organisation SAF was consulted about the changes but rejected them, saying firms already had difficulty organising production schedules as a result of parental time off and reminding Persson he had promised to help private industry.

"These will be empty promises unless the government cuts red tape instead of adding to it," the SAF said in a statement.

Swedish state benefits for parents and children, among the most generous in the world, were eroded during the economic recession in the 1990s and Persson's government has pledged to restore them in full and even extend some.

Seventy percent of mothers and 85 percent of fathers of children aged 10 or under are employed, making kindergarten care essential for most families.

The government wants local authorities to extend child benefit rights and cap childcare costs from 2002, and plans to introduce free pre-school for four- and five-year-olds from 2003.

Parents do not need to be married to collect benefits, and a significant minority in the Riksdag thinks homosexual and lesbian couples should be included.

At present the father and mother of a child get 12 months parental leave on up to 80 percent pay. They can decide how many months each will take, but the father must take his month or forfeit it.

Employers have to keep jobs open for parents and the mother can stay off work unpaid for a further six months if she wishes.