The Japan Federation of Economic Organizations (Keidanren) proposed Tuesday that private entities be allowed to get involved in state-run postal services early in order to accelerate the system's streamlining.

Japan's biggest business group proposed involving the private sector as early as 2003 in deliveries of registered, express and other types of mail, excluding letters and postcards with postage of 90 yen or less.

Postal services operated by the Posts and Telecommunications Ministry will be transferred to a newly created postal business agency in 2001 and eventually to a public corporation to be set up in 2003.

Keidanren's proposal was prompted by the inefficiency of the state-run postal business, which is expected to run up a deficit of 59.6 billion yen for fiscal 2000.

It called for the creation of a neutral body to study reform measures, arguing that discussions under the posts ministry would lack impartiality.