TOKYO: Japan on Friday pledged 5.5 billion dollars in aid over three years for Southeast Asia's five Mekong River nations, seeking to deepen ties with the region amid growing influence from China.

Prime Minister Yukio Hatoyama, who has pushed the concept of an EU-style Asian community, announced the more than 500 billion yen in loans and grants to his counterparts from Cambodia, Laos, Myanmar, Thailand and Vietnam.

Eighty percent of the overseas development assistance would be in low-interest yen loans, for projects ranging from regional highway links to water projects and technological training, a government official said.

"The Mekong region holds the key to developing an East Asian community," said the premier, whose centre-left government took power in September. "Japan would like to contribute to the stability of the Mekong region."

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

The goal of the grouping is to enhance development through cooperation -- but the summit started under a cloud amid the latest spat between Thailand and Cambodia who on Thursday recalled their ambassadors from each others' capitals.

The neighbours have fought deadly skirmishes since July 2008 over disputed land around a temple. The latest flare-up arose when Cambodia named the fugitive former Thai premier Thaksin Shinawatra as a government adviser.

Thailand threatened Friday to seal the border with Cambodia, accusing Phnom Penh of "a hard line and uncompromising attitude."

Another guest in Tokyo was the prime minister of military-ruled Myanmar, Thein Sein, whose country has been criticised for human rights abuses, including its long detention of pro-democracy leader Aung San Suu Kyi.

Hatoyama was to meet Thein Sein, Myanmar's first premier to visit Japan since 2003, on Saturday for bilateral talks.

The meeting will come days after senior US envoys travelled to Myanmar for Washington's first direct talks with the isolated regime in years -- an overture which Hatoyama said he welcomed, according to the official.

Another Japanese official earlier said engagement may bring change in the country formerly known as Burma, saying: "We need to continue to encourage the Myanmar government to take positive steps in the process of democratisation."

The Mekong summit does not include Asian giant China, which has in recent years stepped up aid and investment in the region, from rubber plantations and mines in Laos, to trade with Myanmar.

A Japanese official, speaking in a pre-summit media briefing on condition he not be named, denied Japan was competing with China for greater influence in the lucrative region of about 220 million people.

"We don't need to compete with others," the official said, arguing that Tokyo and Beijing have "very good relations" when it comes to coordinating policies on regional development.

But Takashi Inoguchi, dean of the University of Niigata Prefecture, said "the Japanese government thinks it is very important" to foster deeper ties with Southeast Asia in view of China's growing presence.

"The phrase 'big market in Asia' may bring to mind China or India, but growth is gathering momentum in ASEAN nations," he said, referring to the 10-member Association of Southeast Asian Nations.