A government advisory panel proposed Tuesday that a new strategic committee for foreign assistance be set up and the Japan International Cooperation Agency's functions be expanded.

The panel has proposed that JICA absorb the aid loan division of the state-backed Japan Bank for International Cooperation and its remaining international financing division should move to a new public entity to be created through a consolidation of government financial institutions.

The report was submitted Tuesday afternoon to Chief Cabinet Secretary Shinzo Abe by the panel of six experts headed by former Prosecutor General Akio Harada.

The government plans to set up an official development assistance committee as early as this month and incorporate the key elements of the report related to state financing into an administrative reform bill it aims to submit to the Diet later this month.

The panel, tentatively called the council on overseas economic cooperation, will come up with strategies not only on ODA but also on other official and private-sector financing deemed to serve national interests, according to the report.

The committee will be headed by the prime minister and the foreign, finance and trade ministers plus the chief Cabinet secretary will sit as regular members. Other Cabinet members will be asked to join if necessary.

The report recommends integrating JBIC's international financing division into a new governmental lending institution that will be formed through a merger of existing state-backed lenders. The division should keep JBIC in its name and maintain some independence.