Japan's 2,600 towns and villages should be amalgamated to reduce the number of municipalities to around 1,000 to tie in with the planned decentralization of administrative power, according to the new chief of the Home Affairs Ministry.

Toranosuke Katayama, who assumed the post in last week's Cabinet reshuffle, said the national government is prepared to push forward with mergers of local municipalities.

"The 21st century will be the century of local autonomy (in Japan, but) the current local municipalities don't have the ability to handle a task of that scale," Katayama said in an interview.