A key government panel on economic and fiscal policy is expected to recommend next month a partial privatization of employee pension programs and sweeping deregulation, government sources said Thursday.

They said that in its much-awaited policy paper due out in late June, the Council on Economic and Fiscal Policy will probably propose the privatization of such high-profile public entities as Japan Highway Public Corp., Japan National Oil Corp. and Haneda and Narita airports.

It is also likely to call for moving up privatization of Electric Power Development Co. from 2003.