Ministry of Economy, Trade and Industry official Shuichi Tashiro said the subsidies will be doled out next fiscal year, which begins April 1.

Japan is betting that the next-generation of high-tech products and computer networks will rely on open-source software, in which the underlying code is public and open for modification, unlike Microsoft's proprietary software.

Tokyo has already budgeted 50 million yen (US$416,000) for next fiscal year to study the possibility of switching government computers to an open-source operating system.

Like computers, most high-tech electronics products such as digital cameras, refrigerators and air conditioners require built-in software to control their functions.

U.S. computer giant IBM has thrown its considerable weight behind open-source software, and some Japanese companies are joining in.

In December, Sony Corp (news - web sites). and Matsushita Electric Industrial Co., both major Japanese electronics makers, said they will jointly develop a Linux-based system for digital consumer electronics.