A district court rejected Thursday a lawsuit filed by the operator of 10 Korean schools in Osaka Prefecture seeking nullification of a decision by local authorities not to pay subsidies.

Based on a 2010 proposal from then-Osaka Gov. Toru Hashimoto, the schools were told to remove portraits of late North Korean leaders and sever ties with the pro-Pyongyang General Association of Korean Residents in Japan (Chongryon) as part of a four-point requirement to receive the subsidies. They also had to follow Japan's education curriculum guidelines and release financial statements.

They did not meet the requirements and both the Osaka Prefectural and Municipal governments, which introduced the criteria, halted the subsidies in fiscal 2011. The school operator plans to appeal the Osaka District Court ruling.