The financial situation at prefectural and municipal governments continued to worsen in fiscal 1998, according to a government white paper released Friday.

The 47 prefectures' combined accounts ran into the red in fiscal 1998 for the first time in 20 years, mainly because the Tokyo, Osaka, Kanagawa and Aichi prefectural governments had deficits, says the 2000 white paper on local finances.

Of the more than 3,000 municipalities, 23 were in the red in the fiscal year, up 10 from the year before.