The controversial diabetes drug Rezulin can remain on the market but consumers should receive special warnings with each prescription noting that it can cause sudden and lethal liver failure, the government decided yesterday.

The Food and Drug Administration also told doctors that fewer patients should receive Rezulin--only those whose diabetes is not adequately treated by competing medicines. Rezulin is not intended as a first-line drug. And all Rezulin users will have to get even more frequent liver tests than previously required, the FDA ruled.

Manufacturer Parke-Davis mailed letters to hundreds of thousands of doctors yesterday notifying them of the new restrictions. In a few weeks, consumers will start receiving the special warnings--information sheets known as "patient package inserts"--at the drugstore when they purchase Rezulin. The sheets will inform them that because Rezulin can damage the liver, they will need a liver test every month during the first year of Rezulin use, and quarterly testing after that.

However, testing isn't fail-safe: Several patients have suffered fatal liver damage just weeks after they passed a liver test.

"The overall message is that patients should speak to their physicians about whether Rezulin is right for them, or whether there are alternatives that will control their disease," said FDA's endocrinology chief, John Jenkins.

Consumer advocates had urged the FDA to ban Rezulin, and said the FDA's move was inadequate.