Local governments are putting together their supplementary budgets for this business year and their public works projects may be the sole support for an ailing economy. But worries that planned spending may not happen run deep.

Nearly eight trillion yen ($59.2 billion) in public investment was promised as part of a huge stimulus package announced in April -- four trillion yen of which is dependent on local government expenditure.

Municipal authorities are expected to come up with 1.5trillion yen worth of spending by themselves while the rest of the four trillion yen has been allocated for joint projects to be financed by the central government and local governments.

Seeking to allay fears that local government financial woes and continued deterioration in the economy will mean the planned spending will be too little and too late, the central government asserts that the money is on its way.

It plans to bring forward the implementation of projects, with government spokesman Hiromu Nonaka calling this part of "a strong message to the G7" which meets on Saturday in Washington.

Reports on Wednesday said the government was likely to do this by increasing its second supplementary budget for this fiscal year.

It also plans to pay for the advance payments local governments have to make to construction firms when they place public works orders.

Local governments, faced with falling tax revenues and strained by past economic packages, have become increasingly vocal about their financial distress -- but recent central government moves have put them between a rock and a hard place. "If the central government is saying it's going to take on advance payments, then local authorities are going to have a hard time refusing," said Kenji Arata, economist at MCM Asia Pacific. "They are putting on a lot of pressure."

Indeed extra budgets for most prefectures announced so far show year-on-year rises with large public works allocations, including those with the greatest fiscal woes.

Even Kanagawa prefecture -- one of the most populous of Japan's 47 prefectures -- which declared a state of fiscal emergency earlier this month, has compiled a large extra budget with 70 percent of that going towards public works spending.

"The final figures aren't in but it looks like the local government target for the package will be met," says a Home Affairs Ministry official.

There are also signs that local governments are already moving to contract out work.

Insurance taken out by firms on public works contracts with local governments jumped 10.6 percent in August from a year earlier -- the first substantial rise this year, according to data from the Surety Association of Construction Companies.

But there is also evidence that local authorities will betaking an increasingly cautious stance towards spending.

While compiling a "fairly large" supplementary budget, the Tokyo Metropolitan government, the nation's largest municipal body, says it will only be implementing joint projects. Governor Yukio Aoshima also held a meeting on "fiscal consciousness" on Wednesday, warning of severe business conditions and the need to streamline the administration.

Public investment is also, at best, a double-edged sword. Projects are routinely criticised as a waste of taxpayers' money, lifting local governments' debt when they can least afford it, and as mere pork-barrel politics for the ruling Liberal Democratic Party.

Ever-deteriorating business conditions -- the economy has shrunk for three consecutive quarters -- also mean that any potential stimulative effect decreases dramatically.

Construction firms which carry out the projects are more likely to use the money to pay back debt than invest in new machinery, and construction workers, who account for a whopping 11 percent of the work force, like other consumers will probably save rather than spend.