"One of my worries is that it could end up being a bailout for Japanese banks heavily involved in lending, particularly to Thailand and Indonesia," Brookings' Ed Lincoln told Reuters Television in a telephone interview.

"It is entirely possible that the money might end up being used by borrowers in Thailand and Indonesia to pay back loans to Japanese banks, and my guess is that the Japanese banks... will not end up extending new loans," added Lincoln, a one-time adviser to the US ambassador to Japan.

But Toru Kusukawa, chairman of the board of councillors at Fuji Research Institute, said the plan would at least help prevent Japanese banks from withdrawing further from the region.

"If some extension of credit is made by the Japanese government, some money will come back to Japanese banks...that doesn't mean they'll be saved by moral hazard..." Kusukawa told Reuters Television.

Lincoln also expressed concern that conditions for Asian countries to receive aid under the Miyazawa Plan might be too lenient. "I would worry that the Japanese government is not as concerned about conditionality as the US government or the IMF would be, and that's a problem," he said. "It's not good for the debtor countries to be getting conflicting signals."

Fuji Research's Kusukawa said, however, that Japanese conditions would be basically in line with those of international bodies, although they might differ somewhat.

"We don't want to make Japan's extension of these facilities a moral hazard so we must be more or less along the lines of international organisations' efforts," Kusukawa said.

But he added: "Because we are situated in geographic proximity, we might know better about the real situation of the countries concerned so we might have a deviation from the rules applied by Washington. But by in large weshould stick to multilateral cooperation."

Moral hazard refers to the condition in which lenders and borrowers undertake excessive risks in the belief that there will always be a government bailout if needed.

Japan's finance minister Kiichi Miyazawa in October announced the $30-billion plan to promote economic stability in crisis-hit Asian nations. Of the total, $15 billion is targeted for medium- to long-term financial needs while the rest will be available for short-term needs such as trade financing.

Japanese officials are expected to discuss possible assistance under the plan with potential recipients at a gathering of the Asia-Pacific Economic Cooperation (APEC) forum beginning this week in Kuala Lumpur.

World Bank president James Wolfensohn, meanwhile, praised Japan's efforts to ease the Asian crisis at a news conference in Tokyo.

"I must pay tribute to the support the Japanese government has given, perhaps uniquely among the G7," Wolfensohn said. "I think really the Japanese people and theJapanese government should be getting a lot more credit than they are."