A Liberal Democratic Party panel in charge of energy policy recommended in a report released Wednesday the introduction of an environmental tax on gasoline and other fossil fuels to cut carbon dioxide emissions.

It is the first time the probusiness LDP has acknowledged the necessity of introducing a carbon tax, a measure likely to meet strong resistance from the nation's business community.

The decision by the LDP energy panel is likely to give the issue priority when the government reviews the taxation system for fiscal 2001 at the end of this year.