The British Prime Minister, Mr Tony Blair, last night urged Japan and Asia's battered economies to open their financial systems to restore investor confidence.

Interviewed by Japan's TV Asahi, Mr Blair said in response to a question about the Asian financial crisis that Britain was "obviously working very hard with other countries" to try to turn the situation around.

"If the financial system is to work, it has to have openness and accountability," Mr Blair said, returning to a common theme of his four-day visit to Japan.

"That is very, very important. Because that in the end gives people confidence that they know when they get figures from the government and from the financial institutions, they are genuine, they are real, and represent the real situation."

Indonesia, South Korea and Thailand have been the hardest hit by economic turmoil that has swept Asia since last July, prompting huge falls in regional stocks and currencies and intervention by the International Monetary Fund.

Mr Blair praised reforms under way in Japan saying: "I think you are doing the right things in putting through the changes in your financial and regulatory systems. I am sure that is right."

He specifically praised Japan's plans to introduce a "Big Bang" reform of its financial markets, pointing to Britain's emphasis on transparency and accountability.

"The more open the financial system is, the easier it is for international investors and others to have confidence in it. Japan is quite right to proceed with `Big Bang' and you are doing it in the right way as well."

He urged Japan not to be afraid of the trend towards mergers and acquisitions in the securities industry saying that such changes were inevitable in a world where international capital was mobile and there was 24-hour trading.