The Vietnam government had already given basic approval for the Shinkansen system, although it still required financing and formal consent from the prime minister, Nguyen Huu Bang reportedly told the Nikkei business daily.

Funding for the 56 billion-dollar project remained riddled with uncertainties, the report said, with Hanoi seeking Japanese aid and funds from the World Bank and Asian Development Bank.

The 1,560-kilometre (970 mile) high-speed rail link would replace the current colonial-era train line connecting the capital Hanoi with the southern commercial hub of HCM City, a journey that now takes three days.

Vietnam hopes to launch the high-speed trains by 2020 and plans to start by building three sections, including a 90-kilometre stretch between the central coastal cities of Danang and Hue, seen as potentially most profitable.

The Nikkei said Japan's government and its railway industry, facing saturation domestically, want to expand the market overseas for Shinkansen trains and have high hopes for the potential in Vietnam.

However, the report added that cost estimates were still seen as inadequate, and that Japan was believed to have suggested that Vietnam postpone the planned opening of the high-speed rail service until 2036 or later.

Agence France Presse - August 15, 2009