Prime Minister Fukuda wants to ease the burden of energy prices

It is expected to approve the relief package which is likely to cost it about 50bn yen ($447m; �218.6m).

The benefits will include money for heating oil for homes, and aid to bus and airline firms hit by high fuel prices - especially in rural areas.

There are also plans to ease conditions on repaying loans from state-run banks.

"We must fully address the public's concerns abut their daily lives ahead of the severe winter season," said chief cabinet secretary Nobutaka Machimura.

The draft package was assembled after Prime Minister Yasuo Fukuda called on economy ministers to act.

Government figures showed that Japanese consumer confidence fell to its lowest level in nearly four years in November as higher energy costs and grocery prices hit householders.

Oil prices came close to $100 a barrel last month but have now retreated below $90. However, this is still about 30% higher than a year ago