The upper house councillors will vote on the final reform bill, which will use tax payers' money to prop up weak but solvent banks.

The debate is due to open at 2:00 pm (0500 gmt). "We have accomplished major objectives," said Japan's prime minister Keizo Obuchi.

Banks will be expected to ask for money if their capital is weak, although economists warn few banks chiefs may apply since many would have to resign as a condition for accepting the money.

"I want leading banks to respond positively," to the injection of public funds, finance minister Kiichi Miyazawa said.

The head of the central bank Masaru Hayami said on Thursday all the major banks should apply together for public money. Their capital levels were low, he noted.

Eight other laws to be enacted on Monday will nationalise insolvent banks and sell off thier badloans.

Banking shares rose on the Tokyo stock market in the morning trade.

"Even with a banking fix, Japan may need three or more years to get back on the recovery track," senior analyst at Ing Barings James Fiorillo said.