An in-house section of the Japan Bank for International Cooperation has compiled a report proposing the dissolution of the government-backed lending institution, sources said.

The proposal is designed to refute arguments shown in another document prepared by the bank's leadership urging the government not to abolish the bank amid the fray over Prime Minister Junichiro Koizumi's proposal to consolidate eight government-backed lending institutions, the sources said Saturday.

The report, already submitted to some government officials and the ruling coalition, carries a set of policy recommendations and critical statements on the operations of the lender, whose balance of loans was 20.9 trillion yen as of March 31.