Washington ? Republican congressional leaders said they sealed a tentative agreement Saturday on a new prescription drug benefit for the nation’s seniors, which would be the largest expansion in Medicare’s history.

“We have come to an agreement on principles,” Senate Majority Leader Bill Frist said.

Talks that lasted most of the day smoothed over the last remaining wrinkles in the bill, including a proposal to have traditional Medicare compete directly with new private insurance plans and a plan to encourage employers to maintain drug coverage for retirees, officials said.

Two key Democrats, Sens. Max Baucus of Montana and John Breaux of Louisiana, joined Frist, Speaker Dennis Hastert of Illinois and other top Republicans in Frist’s office to announce the accord, which Baucus stressed would remain tentative until lawmakers had a chance to see the details of the complex legislation.

But the agreement ends months of negotiations over the drug benefit and a broad reworking of the Medicare program to give private insurers a new large role in health care for 40 million older and disabled Americans.

It must win approval of House and Senate negotiators, many of whom have been meeting for months in search of a compromise. The legislation would then go to the full House and Senate, where tough questions await from lawmakers in both parties.

Leading Senate Democrats, including Sen. Edward M. Kennedy, D-Mass., have been critical of the details of the legislation as they have emerged piecemeal from the closed-door talks. “I remain deeply troubled that this plan will undermine the reliability and affordability of Medicare for our nation’s seniors,” Kennedy said in a statement issued after the agreement was announced.

“We’ve not seen all the details, but it sounds like a bad deal for seniors and a good deal for the big drug companies and HMOs,” added Senate Minority Leader Tom Daschle, D-S.D.