The secretariat of a government panel charged with drawing up administrative reforms plans to call for the privatization of Shoko Chukin Bank, the state-run lender to small and midsize companies, as well as 57 of 86 government-backed public corporations, government sources said.

Among the corporations recommended for privatization are Japan Mutual Aid Association of Public School Teachers and Japan Federation of Certified Public Tax Accountants' Association.

"It is desirable to make Shoko Chukin Bank into a private-sector legal entity," a report compiled by the secretariat says.

A private-sector legal entity is an entity with a basis in law but which does not receive an official subsidy to fund its recurring costs. Public investments are pulled from such a body.

Shoko Chukin is under the jurisdiction of the Ministry of Economy, Trade and Industry.

The recommendations by the secretariat are based on a review of Japan's 163 public corporations, which are either entities that receive annual budgetary aid or publicly certified associations with close ties with the government.

In line with Prime Minister Junichiro Koizumi's goal to reduce the bloated bureaucracy, the government has been proceeding with efforts to either shut down such entities or cut annual budgetary appropriations to finance their activities.

Koizumi has pledged to strip a combined 1 trillion yen from the budgets of government agencies and these public corporations in fiscal 2002 to limit net government bond issues to less than 30 trillion yen in the year.

The draft report calls for completely privatizing six public corporations, including Japan Highway Public Corp., Metropolitan Expressway Public Corp., Hanshin Expressway Public Corp. and Government Housing Loan Corp.

The six are under the jurisdiction of the Land, Infrastructure and Transport Ministry.

As for the Finance Corporation of Local Public Enterprise, which lends money to publicly funded corporations, the draft calls for making it a private-sector legal entity or turning it into a new entity whose head office takes charge of administrative work at the corporation's existing regional offices in order to cut costs.

The draft also appeals to the government to devise blueprints for eventually privatizing Nippon Telegraph and Telephone Corp., East Japan Railway Co. and Kansai International Airport Corp., mainly by unloading the portions of their shares held by the government.

The secretariat stopped short of demanding the privatization of Small Business Finance Corp. and five other government-backed lending institutions in light of criticism that their privatization would affect small and midsize firms dependent on their loans.