The government boosted subsidies to the Institute of Technologists by 2 billion yen after Liberal Democratic Party policy chief Shizuka Kamei demanded the increase, sources said Thursday.

The institute is the pet project of Tadao Koseki, the founder of KSD.

President Kamei made the demand after Masakuni Murakami, a former LDP power broker suspected of taking bribes from promoters of the institute project, instigated it, the sources familiar with the case said.

The sources said that at Kamei's request the Labor Ministry gave the institute 2.05 billion yen in subsidies on top of 6.5 billion yen that had been set aside in fiscal 2000 to finance construction of the institute.

The Institute of Technologists in Gyoda, Saitama Prefecture, opens in April.

The sources said Kamei took on the job of lobbying Labor Ministry officials at the behest of Murakami, who has allegedly received at least 72 million yen from KSD, a ministry-supervised mutual aid organization for small businesses.

Construction of the institute, a project promoted by Koseki, KSD's former president, emerged as a political scandal that has forced Murakami to resign his Upper House seat and endangered the coalition government of Prime Minister Yoshiro Mori.

According to sources familiar with the KSD scandal, Koseki asked Murakami, a former labor minister and the former head of the LDP caucus in the Upper House, in November to use his influence within the LDP to get the Labor Ministry to increase funding to the institute project.

The sources said Koseki wanted additional state subsidies for the institute as private donations to the project.

Under the original plans, promoters of the institute project were supposed to collect 6 billion yen from private funds, while the state and Saitama Prefecture would contribute 6 billion yen each as subsidies.

Fund pledges from private sources came only to a projected 40 million yen by September 1999, when promoters were due to seek government approval for the institute project.

The sources said Murakami sought out Kamei for help to lobby the Labor Ministry for extra funds, and Kamei urged the ministry to increase funding, putting the request in the name of the LDP.

Kamei's aides have acknowledged that Kamei attended a breakfast meeting with senior ministry officials in late November where the extra funding was discussed.

Kamei attended the meeting at the request of Murakami, then the head of a parliamentary group in charge of promoting the institute, the aides said.