The Council on Economic and Fiscal Policy on Monday established four general spending priorities for a planned second supplementary budget for the fiscal year.

The 2.5 trillion yen extra budget should prioritize urban redevelopment, revitalization of communities, promotion of science, education and information technology, and steps to deal with the falling birth rate and aging population, the council decided.

In addition, the planned policy package should be in line with the government's structural reform drive while providing emergency support for the ailing economy, said Heizo Takenaka, state minister for economic and fiscal policy.

The package is expected to be finalized later this week after specific budgetary allocations are worked out by the Finance Ministry and other ministries, he said.

As for urban redevelopment, the package will call for measures to help reinforce disaster-prevention facilities and urban highways and ease traffic congestion in large cities.

Environmental concerns will be taken into consideration in implementing measures to help revitalize local communities by focusing on projects to refit waste disposal and recycling facilities, among other things.

The package will also call for steps to facilitate joint research activities between private companies and academics as a way to spread information technology in communities.

It will include measures to make public facilities more barrier-free for the handicapped and improve care facilities for the elderly.

The 2.5 trillion yen package will be financed by proceeds from past government sales of shares in Nippon Telegraph & Telephone Corp., the formerly state-owned telecommunications giant.

This financing scheme allows Prime Minister Junichiro Koizumi to get around his promise to cap government bonds at 30 trillion yen for the current fiscal term, a limit reached by the first extra budget.

The government's decision to tap NTT share sales, however, has drawn criticism from economists who argue that the NTT share revenue was supposed to be used to pay off government debt and that the government will now have to somehow come up with additional funds for that purpose.