A Foreign Ministry panel of outside experts on Tuesday urged the ministry to reduce the amount of secret diplomatic funds and strengthen its inspection system in order to regain public trust in the wake of a fraud scandal involving a former ministry official.

In a set of recommendations submitted to Foreign Minister Yohei Kono, the panel said the discretionary funds, the use of which the ministry is not obliged to disclose, should be used strictly for secretive information-gathering activities and must be checked by inspectors.

Nonclandestine expenses, such as the money used by the government's overseas missions to entertain visiting politicians and other VIPs, should be disclosed and placed under the general account. As a result, the diplomatic discretionary funds should be reduced from the fiscal 2002 budget on, the panel said.