Japan aims to develop prototype drone fighter jet in two decades

The plan will be announced this month when the Defence Ministry also unveils its request for a record budget of 5.16 trillion yen ($51 billion) for fiscal 2017, as tension rises in the East China Sea and North Korea steps up its missile threat, government officials with direct knowledge of the matter said.

The military technology plan calls for first developing an unmanned surveillance aircraft in the next decade and then an unmanned fighter jet 10 years later, the document showed.

The rise of 2.3 percent over this year's budget of 5.05 trillion yen marks the fifth successive annual increase sought by the ministry, which is keen to stiffen Japan's defences as North Korea upgrades its ballistic missile technology.

However, one security analyst said the spending was insufficient. "The security environment surrounding Japan is severe, due to neighbouring North Korea and China," said Takashi Kawakami, a security expert at Japan's Takushoku University.

"I personally think it's not enough."

Japan will this month formally unveil budget requests for its defence and other ministries for the year ending March 2018.

The defence ministry's request covers the 100 billion yen cost to upgrade Japan's PAC-3 missile defence system, said one government source, who declined to be identified, as he was not authorised to speak to the media.

Such an upgrade would roughly double the missile system's range to more than 30 km (19 miles), other sources have said.

The budget proposal also includes the cost of production of the Block IIA version of the Standard Missile-3 system being jointly developed with the United States to shoot down missiles at higher altitudes, the source added.

The ministry will also allocate budget funds to acquire an upgraded version of the F-35 stealth fighter, made by U.S. company Lockheed Martin Corp, the source said.

The budget request also includes the cost of strengthening the coast guard in the southern islands of Miyakojima and Amami Oshima to allay worries over China's more assertive activities in the East China Sea, said the source.