The recommendation, to be submitted to Prime Minister Naoto Kan early next month, will be made by experts tasked with updating the national defence guidelines to be formulated in December, the Yomiuri Shimbun and Asahi Shimbun reported, without disclosing sources.

The draft recommendation, obtained by the two newspapers, proposes to scrap the even deployment of the Self-Defence Forces throughout the country, instead shifting the forces to southwestern islets where the Chinese Naval warships often travel, the reports said.

The draft recommendation says existing defence guidelines, made in the Cold War era, are now seen as "unsuitable" and that it is necessary to respond proactively to limited, small-scale invasions and contingencies on the Korean Peninsula and in the Taiwan Strait, the reports said.

It also proposes lifting outright bans on development and possession of nuclear weapons and their transportation to Japan, which could stir controversy in the officially pacifist nation, the Asahi said.

It also proposes relaxation of restrictions on arms exports to allow joint development and production of weapons with the United States and other allies, the Yomiuri said.

Japan, officially pacifist since the end of World War II, has since then relied on the United States for defence and nuclear deterrence, with its own troops focusing on a "shield" role.

But its experience during the last war -- it is the only country that was attacked by nuclear bombs, first in Hiroshima and second in Nagasaki, both in August 1945 -- has made any move allowing entry of nuclear weapons into Japan highly controversial.

Any sign of Japan taking a higher military profile would unnerve its Asian neighbours who fell victim to Japan's aggression before and during World War II.

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