Japan should adopt a variety of deregulation measures, including the dismantling of the current holding company structure of Nippon Telegraph and Telephone Corp. and permitting companies that issue stocks to run hospitals, a government advisory panel recommended Tuesday.

In a report submitted to the government's Administrative Reform Promotion Headquarters, the Regulatory Reform Committee warned of a widening gap between Japan and other countries where deregulation has activated their economies.

The report says it is necessary for the government to accelerate reforms in social as well as economic structures and to reconsider the current legal system.

The proposals, which cover 15 fields, including the environment, social welfare and education, are likely to become pillars of a new three-year deregulatory program from fiscal 2001 expected to be endorsed by the government by the end of the year.

In the field of medicine, the report says the government should consider authorizing companies that offer their shares to investors to enter hospital management as quickly as possible in order to improve the quality of medical treatment and restrain rises in medical fees by stimulating competition among hospitals.

It also says scrapping the NTT group's holding company is necessary so that the group firms are able to compete against each other without being bound by holding company limitations.

On labor and employment, the panel urged the government to amend the current system in order to allow manpower agencies to dispatch registered staff to companies in the manufacturing sector.

The panel was set up in 1998 under the Administrative Reform Promotion Headquarters, currently headed by Prime Minister Yoshiro Mori. It is led by Yoshihiko Miyauchi, chairman of major leasing firm Orix Corp.

Briefing reporters following the submission of the report, Miyauchi expressed frustration over the tardy pace of deregulation.

"Although this committee has played its role, the gap (in the levels of deregulation) between Japan and other industrialized nations seems to have widened," he said.

Miyauchi urged the panel to deal with a wider variety of issues and make decisions more quickly in the future so that it can give added thrust to Tokyo's deregulation efforts.

Indeed, panel members say that regulatory reforms have been especially slow in medical and other social sectors. While the deregulation panel has worked hard on scrapping economic regulations, government ministries and agencies have implemented a number of "economic regulations in the disguise of social regulations" to ensure workers' safety and health and protect the environment, one panel member said.