The Liberal Democratic Party has worked out legislation aimed at tapping more corporations for campaign funds by allowing certain foreign-owned companies to make donations, according to sources.

Current law bans foreigners and foreign corporations from making political donations.

In addition, the Internal Affairs and Communications Ministry considers companies owned at least 50 percent by foreigners or foreign entities to be banned from giving to political parties.

However, more and more overseas investors have become major stockholders in Japanese firms in recent years.

With the revision, the LDP appears to be hoping to secure donations from such companies.

The proposed legislation to revise the Political Funds Control Law, endorsed Monday by an LDP panel on implementing party reform, retains a provision banning firms more than half-owned by foreigners from making political donations, but it would exempt companies based in Japan and listed on a domestic stock exchange.

The revision would enable donations from blue chip firms such as Canon Inc. that increasingly have been drawing the attention of foreign investors.

Canon, based in Tokyo, is owned just over 50 percent by foreigners.

The company is banned from making political donations even though it belongs to the nation's biggest business lobby, the Japan Business Federation (Nippon Keidanren), which often makes policy proposals to the government.

Canon Chairman Fujio Mitarai has been elected to head the business group starting in May.

After gaining consent from its junior coalition partner, New Komeito, the LDP is planning to present the bill during the current Diet session that runs through June 18 and put it into force immediately, panel members said.