Japan Airlines moved toward being placed under effective government control after a joint-stock corporation specialising in corporate reconstruction accepted the carrier's formal request for support Thursday.

The government plans in a Cabinet meeting Friday to approve the establishment of a new rehabilitation task force, made up of related ministries and agencies and led by construction and transport minister Seiji Maehara.

The government also will consider special legislation to reduce the level of JAL's corporate pension payments--a focal point of its reconstruction. It would aim to submit such legislation to the next ordinary Diet session, which convenes in January.

Such a turnaround effort under effectively government control with the support of the corporation--the Enterprise Initiative Turnaround Corporation of Japan (ETIC)--would be a huge departure from the reconstruction path JAL has flown to date.

Maehara touched on the issue of JAL's reconstruction in a House of Councillors plenary session Thursday.

Giving a reason for placing it under government control, Maehara said: "In the unlikely event that JAL stops flying, it will have a grave impact on Japan's economy. It's only one company, but it has the trappings of a public entity."

JAL President Haruka Nishimatsu visited ETIC on Thursday afternoon and held a preliminary consultation with the organisation--the first stage of procedures.

ETIC will now start to strictly assess JAL's profitability and listed assets, and scrutinise the details of the turnaround plan that JAL will draw up with major banks.

The corporation will decide by the end of the year whether to provide support for the carrier.

A decision in favour of supporting JAL's turnaround would see ETIC purchase the airline's loan portfolio from more than 20 financial institutions and call on major banks to write off debts or accept debt-for-equity swaps.

ETIC would support JAL for a period of three years or less, in principle.

It would need to work closely with the finance ministry and health, labour and welfare ministry in dealing with the reconstruction.

Specific reconstruction measures would include having the government guarantee the 180 billion yen in bridging loans believed to be needed during November, boosting JAL's capital through public funding, and considering special legislation regarding the airline's corporate pensions.

The government task force will put together a comprehensive and drastic reconstruction plan--a package that would include the above measures.

On Thursday evening, Maehara visited health, labour and welfare minister Akira Nagatsuma and called for his cooperation over the pensions issue.

According to Maehara, Nagatsuma responded to the request positively, saying, "I hope we can work closely together."