"Heads of public corporations will find it difficult to hang on to their positions if their reform targets are not met within this year," said Jin Nyum, chairman of the Planning and Budget Commission, in a meeting with senior Korean journalists.

An amendment to the management regulations for state-funded agencies would allow the commission to recommend the head of a public corporation be sacked if the firm's reform efforts prove insufficient.

The amendment was scheduled to be approved by the National Assembly in early December and to take effect from January 1, 1999.

"Even the heads of public firms who have not yet neared the end of their terms will feel uncomfortable if they have not faithfully adhered to their reform schedules," said Lim Sang-kyu, a spokesman at the Planning and Budget Commission.

The commission said in August it would sell or merge 46subsidiaries of 19 state-run companies by the year 2002 as part of its privatisation plans, slashing 20 per cent of some 143,000 jobs.