A government advisory panel reviewing the organizational aspects of Japan's official development assistance suggested Wednesday that a strategic council be set up for the prime minister to take the lead in deciding key aid projects and other basic ODA policies, panel members said.

Comprising the prime minister, the chief Cabinet secretary, the foreign and other key ministers, the council will decide such policies as major projects to be financed with low-interest yen loans and annual aid policies for a coming fiscal year starting in April, the panel members said.

The idea falls in line with a proposal Jan. 19 by Foreign Minister Taro Aso to create a "small, compact group of Cabinet ministers" to draw up ODA strategies, floated with the aim of having his ministry retain its central role in ODA decisions as a diplomatic tool.

The panel, chaired by former Prosecutor General Akio Harada, also agreed that the Foreign Ministry will play the core role in coordinating the planning of specific ODA projects with the Finance, trade and other ministries and agencies.

The council will also discuss major projects overseas to be financed with Japan's public nonaid loans "from such viewpoints as coordination with ODA and national interests of securing resources and international competitiveness."

Both types of external loans are currently extended by the state-backed Japan Bank for International Cooperation.