A policy panel of the ruling Liberal Democratic Party said Thursday it will try to draw up by the end of December a bill to consolidate the nation's 47 prefectures into 10 larger, more powerful regional governments.

The system, supported by Prime Minister Taro Aso, is aimed at decentralizing the central government's power and budget so that regional administrative authorities can better deal with such key issues as the country's low birthrate, aging society and struggling rural economies, according to the panel.

If realized, the new system to be launched by 2017 will dramatically change Japan's local governance and therefore, "it must have support from the people," a panel member said.

The panel hopes to submit the bill to the next Diet session.