Prime Minister Junichiro Koizumi said Friday urban renewal is key to economic structural reform and reviving Japan.

"The (economic) power of urban areas in Tokyo and Osaka has been declining compared with other urban areas in the world since the 1990s," Koizumi said at the first meeting of the government's city revitalization panel, which he heads.

"Harnessing private-sector energy for cities is the key to economic and structural reform and revitalizing all of Japan," he said