Japan and Britain hope to agree by the end of the year to merge their next-generation Tempest and F-X fighter programmes, sources said in July.

Those talks, aimed at a joint project to field a plane in the mid-2030s, remain on track, according to four other people familiar with the discussions.

“Japan could not oppose exports and neither could we insist that Japanese components be removed, so we are discussing what we can do about that,” said Onodera, chairman of the Liberal Democratic Party’s Research Commission on National Security.

Japan ended a ban on military exports in 2014 in a bid to promote overseas sales. It hoped the change would allow its armed forces to cut procurement costs and give domestic arms makers such as Mitsubishi Heavy Industries access to foreign markets that will boost profits and bolster the nation’s defence industry.

An export boom, however, failed to materialise because Japan only allowed sales of non-lethal gear such as surveillance and rescue equipment.

“If we are going to sell beyond the countries we jointly develop with, we will need to settle the discussion at home,” Onodera said.

The influential lawmaker spoke as Japan prepares to increase defence spending and revamp its national security strategy to counter what it sees as a growing threat posed by neighbours, including China, Russia, and North Korea.

As part of its biggest military expansion since WWII, Japan is expected to procure fresh munitions, including longer-range missiles; spend on cyber defences; and create a combined air, sea, and land command headquarters that will work more closely with US forces in Japan.

LDP lawmakers, Onodera said, are also discussing a joint US-Japan command structure that could be formed for national emergencies.

“In order to defend Japan, we will be working with the US to deploy units. So, it is only natural that we would want to discuss having a combined command,” he said.