In a TV Asahi programme, senior Democratic Party policy maker Kansei Nakano said the party would offer a plan to handle the bad debt-laden LTCB based on the party's broader financial system legislation, which would have the state purchase all the bank's shares at, say, one yen per share, and temporarily run the bank.

Nobuteru Ishihara, a senior member of the LDP bad loan committee, responded: ``This idea of nationalising the bank, in a special case, is a proposal that very much deserves to be listened to.''

On Friday, LTCB unveiled a red-ink restructuring plan that dumps 750 billion yen ($5.17 billion) in problem loans and asks for taxpayer money to dress up the ailing firm for a rescue merger with Sumitomo Trust & Co Ltd.

The plan includes sacking the bank's senior management, shutting its 33 branches and subsidiaries abroad and speeding up job cuts aimed at reducing staff by 20 per cent to 2,800.

The LDP policy chief Yukihito Ikeda and party bad loan panel head Okiharu Yasuoka agreed to discuss the Democrats' plan but remained cautious.

``If it is a special case, not meant to replace the present `bridge bank' bill, and it is limited to LTCB, then I think it is one idea to consider,'' Ikeda said. ``But I think we can respond (to the LTCB situation) with our present scheme.''

Under the Democrats plan, said party member Yukio Edano,``all the shares would essentially be placed under the government with the bank maintaining its present form, the bad parts would be stripped away, the good parts kept, and funds would be provided with the full faith and credit of the government.''

A special financial system committee of parliament is to begin debating the government's bridge bank bill and other financial bills from Tuesday, but opposition party members on the TV Asahi and two other national television programmes made clear that the LTCB issue would be their first order of debate.

The Democrats and other opposition parties sharply criticised the government's handling so far of LTCB.

They accused the government of concealing that LTCB was already insolvent -- which would disqualify it from a publicly funded recapitalisation -- saying the government was hiding its insolvency in order to promote the LTCB-Sumitomo Trust merger.

They also accused the government of pressuring Sumitomo Trust to accept LTCB as a partner, citing a Thursday meeting in which Sumitomo Trust president Atsushi Takahashi was called in to discuss the issue with prime minister Keizo Obuchi and the head of the Financial Supervisory Agency. Senior opposition Liberal Party member Yoshio Suzuki said the government was ``hiding information from the public while seeking to use public money through extra-legal means.''

Parliamentary vice finance minister Sadakazu Tanigaki, an LDP member, said the issue of whether to use public funds was up to the Financial Crisis Management Committee. The LTCB is expected to seek 500 billion yen ($3.44 billion) to one trillion yen ($6.8 billion).