The Japanese government has unveiled a plan to develop its own internet search engine in a bid to loosen Google’s grip on the web.

A spokesman for Japan’s Ministry of Economy, Trade and Industry today revealed that more than 20 Japanese companies and universities will meet this month to discuss the project, which is designed to counter America’s dominance of the massively lucrative search market.

The companies will include heavyweight electronics firms Matsushita Electric Industrial, Hitachi, NEC and Fujitsu as well as Nippon Telegraph, the telecoms group, and NHK, and public broadcaster, the ministry said.

"Information searches have become a source of wealth," the spokesman told AFP in Tokyo.

"We want to consider what Japanese companies can do in the current situation where overseas forces are dominant …Japanese companies should have competitive power."

The group aims to decide on outlines of the project by around July next year, he added.

The move underlines how the American companies that dominate search – Google, Yahoo and Microsoft – face opposition in some countries and could meet competition from state-sponsored rivals.

In August, the French president Jacques Chirac, pledged to help fund a European internet search engine.

Mr Chirac justified the mooted extension of soft loans to fund "Project Quaero" by claiming: "We are engaged in a global competition for technological supremacy. In France, in Europe, it is our power that's at stake."

The Nihon Keizai Shimbun reported that Japan’s project will stretch over a few years and will start in April 2007 with a total budget of tens of millions of pounds.

The investment comes as Asia is shaping up to be perhaps the most keenly fought market in online search.

Shares in Softbank, Japan's second-biggest provider of broadband internet services and its affiliate Yahoo Japan Corp, surged today in Tokyo after the two companies said they had formed a venture to offer video through an internet portal.

Masayoshi Son, the president and chief executive SoftBank, yesterday told India’s Business Today: "My wish is to become a Google for TV over the internet. We will have several TV channels on the internet. It will have the live streaming of sports, news, entertainment and so on."

• Question marks were raised over Google’s Chinese strategy today after the group told Reuters it has no plans to raise its 2.6 per cent stake in Baidu.com.

  Baidu, , China's leading search engine, floated in August and saw its shares rocket as much as 350 per cent on their debut.

  "We have a very small stake in the company, which is a strategic investment that was made a while back but, as far as I know, there aren't any plans beyond that," Daniel Alegre, the director of international Websearch & Syndication, told the news agency.

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