SEOUL, JULY 1 (WEDNESDAY) -- President Chun Doo Hwan, formally reversing years of intransigence, told South Koreans this morning that he has accepted a package of far-reaching democratic reforms demanded by the opposition, including direct presidential elections.

"Our politics must now cast aside its old shabby ways that are incongruous with our level of economic development and thus achieve an advanced form of democracy that we can proudly show to the world," Chun said on television.

In the short run, the steps are intended to end three weeks of street protests. But the steps and the flexible mentality that made them possible are also being hailed here as a historic step toward democratic government.

The key change is to adopt direct presidential elections, which Chun has until now vehemently opposed. He said he reversed himself because "the general public has an ardent desire to choose the president directly."

Chun appealed for conciliation, saying, "I believe that everyone -- the students who have demonstrated, the policemen who have labored to quell them, the citizens who have been tormented by the clouds of tear gas -- has the same desire to defend and promote freedom and democracy."

Seated behind an empty desk at his office, Chun spoke in his habitual stern tones. It was his first address to the nation on the crisis.

"Amnesties and the restoration of civil rights will be extensively granted, while all those detained in connection with the political situation, except for a very small number of felonious offenders, will be set free," Chun said.

Chun did not mention restoring the political rights of his longtime nemesis, senior dissident Kim Dae Jung. However, he said he fully accepted recommendations from his party chief Roh Tae Woo, who had specifically endorsed letting Kim return to the political arena.

The president said he had instructed the Cabinet to take "the necessary measures" to put the recommendations into effect.

Kim Young Sam, president of the main opposition Reunification Democratic Party (RDP), said, "I welcome the statement, although it has come belatedly.

"It has come as a result of continued struggle for democracy by all the people, including students, intellectuals and religious people. I would like to give the glory to the people. It is the beginning of a new start to democracy, although it is not a complete one.

"The RDP will regard the people's will as the will of heaven and will make best efforts for democratization."

Chun's announcement had been widely expected because Roh announced his own support for the steps on Monday, touching off a flood of praise and optimism inside South Korea and abroad.

South Korea has been ruled by a succession of authoritarian and military-dominated governments since it was founded in 1948. Calls for liberalization have been rejected on the grounds of a military threat from communist North Korea.

The government's concessions were forced by street demonstrations that began June 10 in Seoul and other South Korean cities after Roh was nominated for president. The protests continued despite deployment of tens of thousands of riot police and a plea for order by Prime Minister Lee Han Key.

Although often violent, the protests attracted widespread sympathy from the South Korean middle class. This created fears in the ruling party.

Two days ago, Roh, Chun's handpicked successor, stunned government and opposition members by publicly urging Chun to agree to virtually all opposition demands.

Roh conferred with Chun for 70 minutes yesterday at the presidential Blue House to press for adoption of the proposals.

Since the proposals were announced Monday, they have received overwhelmingly favorable comment from both camps and the press and are credited with helping return calm to the streets.

Most important, they have produced an optimism that is rare in this political system, marked by years of deep distrust between government and opposition.

Roh also urged cooperation with the opposition to revise the presidential election law to make voting freer, release as many political prisoners as possible, give greater freedom to the press and prevent human rights abuses.

Yesterday, the Justice Ministry began screening the files of 1,000 political prisoners for possible release, officials said. More than 200 were released on Monday.

An Education Ministry spokesman said yesterday that the government is considering reinstating college students who were expelled from their schools in connection with antigovernment protests. Since 1984, nearly 300 have been expelled for this reason, the government says. Chun spent much of yesterday in what were described as consultations on political reform with the Cabinet, heads of the judicial and legislative branches and advisers.

Roh yesterday visited members of the committee organizing the 1988 Summer Olympics, which are to be held in Seoul, and told them to work hard to prepare for the games now that the crisis is over.

The main opposition party, led by Kim Young Sam and Kim Dae Jung, formed a committee yesterday to draft a new constitution. The group is expected to present it to the National Assembly next week, a spokesman for Kim Young Sam said.

The government also is expected to present its version to the legislative body soon, after which debate will begin. "If a direct presidential election is accepted {by Chun}, I think this will be resolved very early," the spokesman said.

For the second day yesterday, Seoul and other major cities were quiet, after nearly three weeks of protests and street demonstrations.

In Pusan city, one of the last remnants of the demonstrations ended yesterday when 80 Roman Catholic priests left church administrative offices, where they had been holding a sit-in since June 24 to protest police violence.

National Police Headquarters also removed the highest alert status for its personnel, which had been in effect since June 9, and withdrew riot police from around college campuses and major public facilities, officials reported.

The only fatalities have been a policeman struck by a hijacked bus in Taejon city and an office worker who apparently fell to his death from an overpass during a rally in Pusan.

A student at Yonsei University in Seoul has been in a coma since being hit in the head by a tear-gas canister on June 9. He is not expected to recover.