The guidelines will serve as a basis for defence planners and are expected to be finalised in the coming weeks. They are being updated for the first time since 1995, when only Russia was mentioned by name as a threat.

The main points were presented Thursday to a meeting of security planners from the ruling coalition, said an official of the ruling Liberal Democratic Party charged with defence affairs.

"North Korea's military moves are a major destabilising factor for regional security while there is a need to closely watch such developments as China's military modernisation and expansion of the scope of its sea activities," said a passage of the document quoted by the official.

Earlier this month Beijing expressed regret for the intrusion of a Chinese nuclear submarine into Japanese waters near islands disputed by the two countries.

The passage also mentioned Japan's concerns over weapons of mass destruction and international terrorism, the official said.

"There remain unclear, uncertain factors in areas surrounding Japan, including problems concerning the Korean Peninsula and the Taiwan Strait," the passage reads.

Foreign Minister Nobutaka Machimura said in parliament that Japan would be reducing aid to Beijing "as the Chinese economy develops."

"I think it is appropriate that China graduate from the aid in the near future," he said.

A fact-finding mission of six Japanese lawmakers this month recommended an eventual end of aid to China, citing its explosive economic growth, major military spending and widespread anti-Japanese sentiment.

The aid to China has fallen by half in the past three years to about 108 billion yen (1,05 billion dollars) in the fiscal year to March 2004 but the outstanding loan balance has continued to grow, it said.

A report in October meant to chart ideas for the defence guidelines said Japan should consider overhauling its post-World War II pacifism to launch pre-emptive strikes in the event of a threat.

A month later a confidential report leaked to the media said Japanese defence planners had mapped out scenarios for an invasion by China.

Japan's bloody occupation of China before and during World War II remains etched in the memory of many Chinese. The Japanese football team was loudly jeered this summer when China hosted the Asian Cup, which Japan ultimately won.

China has also reacted furiously to Japanese Prime Minister Junichiro Koizumi's repeated pilgrimages to the Yasukuni shrine in Tokyo which is dedicated to the country's war dead, including convicted war criminals.

Koizumi was chastised over his pilgrimages when he met Chinese President Hu Jintao on the sidelines of a summit in Chile last weekend.

Koizumi has avoided saying whether he will keep visiting the shrine. "Regarding a future visit, I will make an appropriate judgment," he said Friday.

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