The initiative is a bid to break the deadlock between Japan and the European Union over the venue of the International Thermonuclear Experimental Reactor (ITER) project, the evening edition of the Nihon Keizai Shimbun said.

Participants in the 10-billion-dollar project are the European Union, Japan, China, Russia, South Korea and the United States.

According to an agreement among the participants, the host country or region will pay 274 billion yen (2.5 billion dollars), or 48 percent of the construction costs, the Nihon Keizai said.

But Tokyo is now planning to increase the size of its contribution by 100 billion yen (895 million dollars) to bring the project to the northern Japanese village of Rokkasho-mura, the economic daily said.

Immediate confirmation of the report was not available.

The EU, which is trying to host the project at the French town of Cadarache, has reportedly won support from Russia and China, while the United States, Japan and South Korea appear to prefer the Japanese site.

Government ministers, including Chief Cabinet Secretary Hiroyuki Hosoda and Science and Technology Minister Takeo Kawamura, are due to meet soon at Prime Minister Junichiro Koizumi's residence to discuss the new proposal, the business daily said.

Japan aims to announce the final proposal to a conference of ITER participants to be held in Vienna in mid-June, it added.

If Japan is selected to host the reactor, it will cost the country a little over 700 billion yen, including the cost of running the facility for 30 years, the Nihon Keizai said, adding that it would be one of the costliest international technology projects in which Japan has participated.

The project is aimed to be a test-bed for what is being billed as a clean, safe, inexhaustible energy source of the future.

It will cost five billion dollars to build the reactor, and five billion to run it for 10 to 20 years, according to project supporters.

The choice of the site must be made by consensus, and not by a simple majority, partly because all parties will be required to fund the reactor.

The Japanese site has many assets: the proximity of a port, a foundation of solid bedrock and the close proximity of a US military base. The French site offers an existing research facility and a better climate.

WAR.WIRE