The government is expected to subsidize chemical firm Chisso Corp.'s compensation payments to victims of pollution-related diseases caused by the firm's plant in Minamata, Kumamoto Prefecture.

The Environment Agency and related ministries submitted a new support plan to the Liberal Democratic Party on Wednesday morning that was later endorsed as an official government plan at a ministerial meeting.

Under it, the government would take over a part of Chisso's accumulated debts to Kumamoto Prefecture with state subsidies and local allocation taxes.

Kumamoto Prefecture has been making loans to Chisso by issuing prefectural bonds since 1978. But because Chisso will be unable to repay the debts with its earnings alone, the government would bear the amount exceeding the company's repayment ability.

Minamata disease, caused by mercury poisoning and discovered in 1956, was caused by Chisso's waste, which polluted the Minamata River and Bay. It can impair nerve functions and be fatal in severe cases.

The prefectural bond's redemption for the next fiscal year is around 7 billion yen. Chisso will repay some 2 billion yen to the prefecture out of its earnings after paying compensation to the patients, and the state will finance the remaining 5 billion yen.

The new plan stipulates that Chisso repay the state with no interest and no due date. The government's support for Chisso's repayment is expected to reach some 100 billion yen in the next 20 years.