"The anti-corruption measures report has been finalised and those involved on the Vietnamese sides were arrested. This is why we are resuming at this timing," said Kozo Honsei, an official at Japan's foreign ministry, after the Japanese Foreign Minister met with the Vietnamese Minister of Planning and Investment in Tokyo.

The scandal, seen as Japan's biggest aid corruption case, broke out in August when four Tokyo-based consultants were arrested in Japan on allegedly bribing Ho Chi Minh City officials in return for consulting contracts in 2001-2003 on a highway project using over $400 million in yen loans.

Data from Japan's foreign ministry showed that the bribe totalled $0.8 million in cash.

The two countries set up a committee in September, which released on Monday a report on anti-corruption measures such as involving third parties in the evaluation of bidding processes.

Vietnamese police also launched a criminal investigation last December and detained two former officials of the East-West Highway project earlier this month.

While the Vietnamese minister Vo Hong Phuc was quoted as saying by Honsei that he hopes to sign yen loan deals by the end of March, another official at Japan's foreign ministry said it has not been decided when exactly the deals will be concluded.

Japan, the world's second-largest economy, provided about $1 billion in yen loans to Vietnam in the year to March 2008.

By Yoko Kubota - Reuters - February 23, 2009