The head of the Air India inquiry is pressing government counsel to reach an agreement with commission lawyers on how much evidence to keep secret, amid concerns that prolonged delays could sink the probe.

Justice John Major said Monday that they must try to "keep this commission afloat" and not let it sink without fulfilling its mandate to investigate the 1985 bombing that killed 329.

The inquiry into the terrorist bombing resumed in Ottawa on Monday, thought it has been stalled for the last two weeks amid a dispute over how much sensitive material should be censored on grounds of national security.

Federal lawyer Barney Brucker said he and chief commission counsel Mark Freiman are making progress on the issue. But neither could set a firm date for when they would reach a resolution.

For now, the witness list has been rearranged so that the commission can concentrate on background issues.

They include issues associated with the creation of the Canadian Security Intelligence Service in the 1980s, early relations between CSIS and the RCMP, and the general perception of terrorist threats in the period before 1985.

But the dispute will come to a head later this month when hearings begin on the actions of Canadian authorities in the days and weeks leading up to the attack.

Major, the former Supreme Court justice who heads the inquiry, threatened two weeks ago to shut down the inquiry if federal lawyers weren't more forthcoming with evidence.

He halted proceedings on Feb. 19, saying the government's claims to secrecy are making it too difficult for him to do his job.

At the time, the justice said he would adjourn hearings until at least March 5, saying he hopes the government would come around to share his view by that date.

The judge has repeatedly said he doesn't want to exclude the families of the bombing victims or the news media if at all possible.

In response, Prime Minister Stephen Harper said he will try to resolve the dispute.

"I have instructed my national security adviser to meet with people in the various departments to impose a non-restrictive interpretation of the law, and to expedite resolution of this dispute as quickly as possible," Harper said.

Some 329 people, the vast majority of them Canadian citizens of Indian origin or descent, died when Air India Flight 182 was blown from the sky by a terrorist bomb in June 1985.

The bombing has been blamed on Sikh separatists who used British Columbia as a base to win a homeland in the Punjab region of northern India.

Inderjit Singh Reyat is the only person ever convicted, on a reduced charge of manslaughter, for his role in the bomb plot. Talwinder Singh Parmar, the suspected ringleader, slipped out of Canada and was shot dead by Indian police in 1992. Two more men, Ripudaman Singh Malik and Ajaib Singh Bagri, were acquitted in Vancouver in 2005.

The inquiry hopes to delve into the troubled relations between the RCMP and CSIS, which is believed to have hampered anti-terrorist operations before the bombing and during the subsequent criminal investigation.

Questions have also been raised about shortcomings in airport security that allowed the bomb that brought down Air India Flight 182 to get on the plane.

CSIS had several key suspects under surveillance long before the attack, but nobody put the pieces of the puzzle together in time to avert the bombing.

The inquiry was about to investigate why the plot was not uncovered when Major abruptly halted proceedings.

Major has no power to reopen past prosecutions or to hold anyone criminally responsible. His inquiry focuses on broader issues of anti-terrorist policy, in the hope of preventing similar tragedies in the future.