The government on Wednesday unveiled an employment plan designed to help construction industry workers laid off due to banks' bad-loan disposal efforts and the ongoing decline in public works spending.

The plan recommends that authorities actively commission businesses and nonprofit organizations to hire former construction workers to conduct environmental preservation and other public services.

The measures in the plan were devised by the Land, Infrastructure and Transport Ministry; the Ministry of Economy, Trade and Industry; and the Health, Labor and Welfare Ministry.

The proposed measures call for providing small and midsize construction firms with low-interest loans and preferential tax treatment if they draft rehabilitation programs, ministry officials said.

The programs could include those that support construction enterprises that diversify into new fields, they said.

Other measures include paying a per capita subsidy of 200,000 yen to businesses that accept and retrain workers released from the construction industry.

The construction industry employs about 6.41 million workers, but if the government slashes public works spending by 10 percent in fiscal 2002 as planned, about 620,000 of them will lose their jobs over the next three years.

In the past, the construction industry itself has functioned as a social safety net, absorbing workers forced out of other industries by the slumping economy.

Many economists say the construction industry will be forced to lay off numerous workers once the bad-loan disposal program imposed by the government leads banks to cut off credit to construction firms.