The Justice Ministry panel will recommend the measure after discussing it with other government ministries and businesses, said Chiho Nakai, an Immigration Bureau spokeswoman.

Japan keeps its borders mostly closed to immigrants and refugees despite an urgent need for new workers due to an aging population and declining work force. Foreign residents accounted for about 1.2 percent of Japan's 127 million people at the end of 2005, according to ministry figures.

Ministry officials believe an upper limit on foreign residents in Japan is needed to maintain public safety, Nakai said. It was not immediately clear how the Justice Ministry panel reached the 3 percent figure.

Japan's National Police Agency reported in February that crimes committed by foreigners rose 16 percent last year to a record high 47,124 cases.

Foreigners accounted for 2.3 percent of all arrests, even though they comprised only 1.6 percent of the total population.

But human rights groups have argued that those numbers are skewed because the total percentage of foreigners in Japan is higher if illegal aliens are included.

They also say social concerns about foreigners' crimes is overblown because visa violations account for a large portion of the offences.

Vice Justice Minister Taro Kono, who is heading the panel, was not available for comment yesterday, his office said.