Funding feud blocks US-Japan troop realignment deal

TOKYO, Apr 14 (Reuters) The United States and Japan have a good chance of wrapping up a deal to reorganise American troops in Japan by early May, but must first resolve a dispute over how much Tokyo will pay to shift Marines to Guam, a US official said today.

The two sides have already missed a March 31 deadline for finalising the plan to realign the approximately 50,000 US military personnel in Japan, which is part of Washington's global strategy to make its forces more flexible to meet modern threats.

The close security allies are expected to hold a ''two-plus-two'' meeting of defence and foreign ministers once details of the plan have been finalised in working-level talks.

''I think we have a better than even chance to have a 'two-plus-two' in early May in Washington, but the Guam financing issue overhangs the entire enterprise,'' a US government official told Reuters after two days of talks in Tokyo.

The United States wants Japan to pay 75 per cent of the estimated 10.5 billion dollar Washington says it will cost to move 8,000 Marines off the southern island of Okinawa, mostly to the US territory of Guam, the US official said.

Japan has said it wants to keep its share to less than half and many Japanese voters and lawmakers oppose paying a hefty chunk given the country's already huge public debt.

''The gap remains quite significant,'' said the US official, who declined to be identified. He said Japan should pay up because the troops were leaving at Tokyo's request.

''It's narrowed, but it's quite significant.'' US Undersecretary of Defence Richard Lawless said the United States had signed off on a plan to relocate the Marines' Futenma air base from a crowded part of Okinawa to an area further north after a local mayor agreed to a slightly revised plan to address complaints about noise and safety.

A deal to close Futenma -- a goal the two allies have been pursuing for a decade -- is a prerequisite for shifting the Marines out of Okinawa. The island is host to about half the US military personnel in Japan and many residents resent bearing what they see as an unfair share of the burden for the alliance.

Affected Japanese communities in Okinama and elsewhere also oppose parts of the plan due to worries about the noise, crime and environmental damage that they associate with the US bases.

Defence Minister Fukushiro Nukaga told reporters that both sides needed to come up with ideas to bridge the gaps.

''It isn't good enough just to state our respective positions,'' Nukaga told reporters. ''The United States should also think about what kind of responses they can come up with.'' Tokyo also has yet to persuade Okinawa Governor Keiichi Inamine, who can legally block the Futenma relocation, to agree to the alternate site on the island.

REUTERS SI PM1444