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The ruling Liberal Democratic Party has decided on a plan to encourage towns and villages across the country to merge into cities, party sources said Saturday.

The LDP hopes to submit a bill to the Diet by this fall to revise a special law to promote the merging of municipalities, after securing support for the bill from its two coalition allies, New Komeito and the New Conservative Party, they said.

The mergers are aimed at streamlining local administrative services.

The change, which would be in effect until March 2005, would lower the minimum population requirement for a city created through merged municipalities from the current 40,000 to 30,000.

The Local Autonomy Law stipulates that a town should have a population of 50,000 or more to become designated as a city. However, a 1998 amendment reduced the minimum figure to 40,000 if a city is created through a merger of two or more municipalities.

The sources said a lowering of the figure by another 10,000 would result in the creation of 10 new cities across Japan. These would include a proposed merger of Eda and three other towns in Hiroshima Prefecture with a combined population of about 36,000.

The LDP envisions such mergers to reduce the current number of municipalities from about 3,200 to about 1,000.