Fishing giant Nissui and four other firms that have owned whaling company Kyodo Senpaku will "soon donate" all of their shareholdings to public interest corporations, a Kyodo Senpaku spokesman said.

Its new shareholders will include the Institute of Cetacean Research, the Japanese government-backed agency promoting whaling.

Environmental group Greenpeace had launched a letter campaign and threatened to blacklist non-whale products distributed worldwide by Nissui.

The whaling exit marks a rare victory for environmentalists in Japan, which has ignored years of angry protests elsewhere in the world and last year doubled its annual whale kill in the Antarctic.

"This decision completely demolishes the commercial foundation of the Japanese whaling industry," Greenpeace campaigns manager Danny Kennedy said in a statement.

"It is clear that even in Japan the message is getting through that whaling is bad for business, leaving the Japanese government trying to restart an industry that no one wants a part of," he said.

Greenpeace also said Nissui -- Japan's second-largest seafood company owning shares in New Zealand-based Sealord and Gorton's of the United States -- would stop distributing and selling whale meat. Nissui was not available for comment.

But the Japanese government, which accuses Western anti-whaling campaigners of not respecting the national culture, vowed to press on.

"The transfer of the shares in the whaling firm will not affect our policies at all," said Hideki Moronuki, an official in charge of whaling for Japan's Fisheries Agency.

"Rather, we welcome the move," he said. "From now on, whaling will be regarded as something backed by all of Japan, not just a particular group in the private sector."

Kyodo Senpaku, which owned and operated the whaling fleet that was constantly harassed by environmentalists during its expedition from December in the Antarctic, also said there would be no change in schedule.

"Under the new regime, we are committed to redouble our efforts so that we can better contribute to the further development of the research and promoting sustainable utilization of whale resources," a company official said.

Japan uses a 1986 loophole in the international moratorium on commercial whaling that allows the killing of whales for research, but it makes no secret of the fact that the meat ends up on dinner tables.

Whalemeat has a sentimental value in Japan. It helped feed the nation as it rebuilt from the ashes of World War II. But environmentalists say the hunt is cruel and risks bringing whales to extinction. They point to a glut of whale on the Japanese market, where an increasing number of schools are introducing whale on school lunches.

The whaling dispute has put Japan at odds with many of its closest political allies such as Australia, European Union nations and the United States.

Japan is campaigning for a full-scale return to commercial catches, saying whale stocks have recovered sufficiently during the 19-year ban.

Japan last year said it will nearly double its annual kill to about 850 minke whales and extend its hunt to whales considered endangered.

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