Huynh Ngoc Sy, born in 1953, was originally sentenced to life in prison at a trial in HCM City last October. He maintained his innocence.

Sy was accused of taking bribes of up to $262,000 in 2003 from a Tokyo-based company in connection with a major infrastructure project - a highway linking the east and west of the city - backed by Japanese aid money.

Sy was deputy director of HCM City's transport department at the time and headed a team in charge of major road schemes.

"The court decided to reduce Sy's life sentence to 20 years," the court official from HCM City told AFP, requesting not to be named.

At the hearing, which began on Tuesday in the southern business capital, Sy repeatedly denied the allegations, the Tuoi Tre newspaper reported on Thursday.

But the appeal court was told that his family paid back three billion dong (now $145,000) to the court after the original trial, the report said.

While maintaining Sy's guilt, prosecutors said his sentence should be reduced because of constant enticements from Pacific Consultants International (PCI) that he take the money so they could win bids for the highway project.

Sy is already serving a six-year sentence for pocketing rent paid by the same firm for the use of state-owned offices.

In 2009 a Tokyo court sentenced former PCI president Masayoshi Taga to a suspended jail term for bribing Sy.

Japanese media reported that former PCI executives admitted paying Sy $820,000 in bribes - more than three times the amount he was accused at his trial of accepting.

Japan, Vietnam's biggest bilateral donor, resumed aid loans to Vietnam in March 2009 after suspending them in December 2008 during the PCI scandal.

Vietnam is rated one of the world's most corrupt nations and graft is a top concern for many ordinary Vietnamese.

The United Nations said in a report in 2009 that the importance of bribes had not declined and graft occurs at all levels of the ruling Communist Party and state, in both the public and private sectors.

Agence France Presse - September 2, 2011