Prime Minister Yukio Hatoyama told a press conference the Mekong region was a "priority area" for Japan's official development assistance (ODA) as it seeks to boost development in the resource-rich area.

A joint declaration said "Japan commits more than 500 billion yen of ODA in the next three years" for the further development of the Mekong region, which includes Cambodia, Laos, Vietnam, Myanmar and Thailand.

"We strongly recognised the need for further strengthening of the Mekong-Japan relationship and cooperation to maximise the potential of the Mekong region," the statement said.

Asian giants Japan and China have for years poured aid and investment into the region, home to more than 220 million people, and are seen increasingly as competitors for influence.

Hatoyama said it was "not fair to say China's increasing involvement in the Mekong region is a disadvantage for Japan," noting Tokyo and Beijing had begun to coordinate policies towards the region.

"It is very important to create mutual benefits by cooperating each other" for "win-win-win relations" among Japan, China and the Mekong nations, he said.

Much of the region along the lower reaches of the 4,800-kilometre (2,980-mile) Mekong River has historically been isolated by war and political turmoil and remains poorer than other parts of Southeast Asia.

Hatoyama, who has pushed the concept of an EU-style Asian community, has set his sights on boosting economic development and has vowed to expand aid, particularly to Cambodia, Laos and Vietnam.

Eighty percent of the 5.5-billion-dollar package would be in low-interest yen loans, for projects ranging from regional highway links to water infrastructure and technological training, a government official said.

The leaders also agreed on an action plan to promote development, protect the environment and fight climate change under the slogan "A decade towards the Green Mekong."

And they demanded that Myanmar take steps towards democracy, calling for transparent elections next year.

The action plan said the leaders "expect that the government of Myanmar would take more positive steps in its democratisation process."

Hatoyama met Thein Sein, Myanmar's first premier to visit Japan since 2003, for a bilateral talks after the summit. He was also to have talks with the other leaders. The content of the meeting was not immediately available.

The Nikkei economic daily said Hatoyama would outline plans to increase aid to the country, criticised for human rights abuses including its detention of pro-democracy leader Aung San Suu Kyi.

Hatoyama hailed Washington's latest efforts to engage Myanmar as beneficial for the entire Mekong region.

US President Barack Obama's administration has recently changed its policy on Myanmar, saying it would push for engagement with the military regime because sanctions on their own had failed to bear fruit.

The leaders at the summit agreed to hold talks every year.

The Mekong group seeks to boost development through cooperation but the summit took place amid tensions between Thailand and Cambodia, after Cambodia named Thailand's fugitive ex-premier Thaksin Shinawatra as an adviser.

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