The two countries are already deploying systems capable of destroying ballistic missiles which are flying outside the atmosphere or descending to strike targets.

The move comes amid a new sense of urgency in Japan over safety concerns following North Korea's string of missile launches last July as well as its first ever nuclear test in October, the report said.

However any assistance faces legal problems as Japan's pacifist constitution bans the use of force in fighting a war on behalf of other countries, a concept known as "collective defence."

The United States wants to select three types of lasers with the aim of developing an operational system in five years, the report said quoting Japanese government sources.

It named a list of possible companies, including Mitsubishi Heavy Industries Ltd. to help in such areas as making the system smaller, the report said.

The United States and Japan are rushing to complete deployment of an anti-missile defence shield by 2010, combining the land-based Patriot Advanced Capability-3 (PAC-3) and the sea-based Standard Missile 3 (SM-3) systems.

The SM-3 intercepts ballistic missiles when they reach their highest point outside of the atmosphere, while the PAC-3 is used to destroy missiles that evade SM-3 interceptions. The accuracy of these systems is still being debated.

SM-3s, jointly developed by the two countries, will be based on destroyers equipped with the state-of-the-art Aegis air-defence system.

The missile-defence project has been a pillar of the strengthened Japan-US military alliance in recent years.

Japan was prompted to boost its missile defenses in cooperation with the United States in 1998 when North Korea lobbed a suspected long-range missile over its main island and into the Pacific.

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