In a report that will be the basis for new defence guidelines to be drawn up by the end of the year, an advisory panel to Prime Minister Junichiro Koizumi said Monday that Japan should study acquiring pre-emptive strike capability.

"Regarding the question of whether it is appropriate ... to possess offensive capabilities against enemy missile bases as a last resort, a decision should be made after thoroughly examining the credibility of deterrence provided by the United States," the panel said in the report.

Masashi Nishihara, president of Japan's state-run National Defence Academy, said it would be "no longer realistic to stick to the defence-only principle."

"It is nonsense to say 'we will react after we've been attacked' at a time when we do not know when terror attacks will hit us," he said.

Nishihara argued that Japan faces "more real threats than it did in the Cold War era" due to possible missile attacks by North Korea or China.

The report did not name any countries as a possible security threat.

Kazuto Suzuki, who teaches international politics at Tsukuba University, northeast of Tokyo, said it was a "landmark" report because it clearly stated that Japan should consider acquiring offensive capabilities.

"If this is adopted as a government policy, it will be a great change in Japan's post-war defence policy," he said, noting the move stemmed from a US plan to realign its military forces globally.

The report "declares Japan can no longer expect to depend solely on US forces for protection," Suzuki said.

However, it was still impossible for Japan to launch pre-emptive strikes as it lacks intelligence, he said.

Takashi Inoguchi, politics professor at the Institute of Oriental Culture, University of Tokyo, said Japan aims to "have a deterrent by keeping the option of pre-emptive strikes open no matter whether it will actually do so."

The analysts interviewed also said Japan should consider how its Asian neighbours would react when it adopts a new defense policy.

"Diplomacy is important and Japan should give full consideration to Asian reactions," Nishihara said. "Although it will be wrong to do what they tell us to do at the expense of Japan's security."

Suzuki said Japan needs to clearly define what "offensive capabilities" it would have and how they would be used to stave off any scepticism arising in Asia and elsewhere.

Any suggestions that Japan is taking a higher military profile have unnerved China and other Asian countries that were invaded by Japan during World War II.

Japan has adhered to defence-only security policy since its bitter defeat in the war under the 1947 war-renouncing constitution with its military now called the Self-Defence Forces.

Koizumi convened the panel of 10 business executives, academics and former defence officials in April to map out defence strategies to cope with terrorist acts and the threat of weapons of mass destruction.

Based on the panel's proposals, the Defence Agency plans to revise its 1995 defence strategy, which has been called into question following the September 11 terror attacks on US targets and growing terrorist threats.

The report also urged the lifting a decades-old ban on weapons exports at least to the United States as Tokyo's research with Washington on missile defence is expected to enter a development phase soon.

The conservative Yomiuri Shimbun newspaper hailed the report as "making a good start for a new defence plan" while The Tokyo Shimbun criticized it for "compromising post-war sanctuaries", such as the arms export ban.