The Federation of Korean Industries (FKI), a lobby group for top conglomerates, or chaebol, said in a statement a preliminary blueprint excluding reform in the automobile sector would be prepared by the end of August.

The timetable for drawing up plans was decided at an FKI task force meeting of the nation's top five business groups including Hyundai, Daewoo, LG, SK and Samsung, the statement said.

"Auto sector reforms will be added to the overall plan after the Kia sale since the issue of a possible local takeover is related to restructuring of the domestic auto industry," said Lee Cheol-haeng, an FKI spokesman.

South Korea in July put up ailing Kia and Asia Motors for sale after unveiling a recapitalisation plan to cut the paid-in capital of the two automakers by 90 per cent, punishing shareholders for throwing the firms into receivership.

Both Kia and Asia Motors have been in court receivership after collapsing in July 1997. Creditors sought receivership for the automakers last October.

The federation said it would open its doors to participation by smaller corporations in talks for the plans.

Last Friday, officials of the top five groups said they would consider signing letters of intent by the end of August to advance the process of restructuring.

South Korea has said swaps of business lines between conglomerates are necessary to enhance the nation's industrial competitiveness.