The Department of Military and Veterans Affairs will oversee the project, said Rene Van Hoorde, marine administrator for the Panama Canal Commission.

U.S. Rep. Jim Saxton said the change was made after the Navy raised concerns about a potential conflict of interest during the ship's passage.

The Burlington County Republican called the move a "significant step" toward a neutral decision on the ship's final site.

The Battleship Commission wants the New Jersey to become a floating museum in Bayonne, Hudson County. Camden also is seeking the World War II ship as a tourist attraction.

"Finally this will create a fair playing field for Camden," Saxton said Monday.

A spokesman for the Battleship Commission expressed no concern over the change, however. Gordon Bishop noted the nonprofit body is an advisory group under the state's Department of Environmental Protection.

"We are all part of state government, which I don't think the Navy understands," Bishop said. "It was the commission that proposed the original towing plan that the canal commission recently accepted and it was (commission chairman) Joe Azzolina who worked out this plan with Gov. Whitman to involve the military department.

"It was a natural," Bishop said of the change.

Ray Martyniuk, a spokesman for the Military and Veterans Affairs Department, said he was not aware of the decision. But, he added, "I may have more information tomorrow."

Van Hoorde said the ship is to begin its passage through the canal Oct. 18. The New Jersey will be the largest battleship towed through the canal while not under power.

It is to be towed to this area from Bremerton, Wash. The Navy, which owns the ship, plans to dock the vessel at the former Philadelphia Naval Shipyard until a decision is made on a final berth.

The ship was built at the Philadelphia Naval Shipyard across from South Jersey. It was stored after World War II at the Military Ocean Terminal in Bayonne.