The Ministry of Economy, Trade and Industry plans to urge steelmakers to cut their combined production capacity for crude steel from 145 million tons to under 125 million tons within three years, ministry officials said Monday.

Japan will present the plan as a nonbinding target Monday to the Organization for Economic Cooperation and Development during talks in Paris.

Excess capacity has been wreaking havoc in the global steel industry, and several U.S. steelmakers have begun to consolidate to survive the flood of cheaper imports.

The reduction of more than 20 million tons was mapped out after holding hearings with domestic steelmakers. The cut includes between 5 million and 10 million tons at factories that are operating or waiting to begin operations, and other plants already scheduled for closure.

A senior ministry official said the plan is "highly practical" and will prop up the falling prices of steel products.

But skeptics question the effectiveness of the plan because domestic production of crude steel for fiscal 2001 is projected to fall to around 100 million tons and even further the following year due to weak demand.

While steelmakers agree excess capacity should be reduced, they are reluctant to accept the government's initiative, industry officials said.