LONDON Japan's Prime Minister Junichiro Koizumi asserted in an interview with the ****Financial Times*** published Monday his determination to proceed with plans to roll back the state sector and speed up the disposal of bad loans.

The premier also dismissed suggestions he was being forced to slow his reform agenda, and signalled he resolved party quarrels over his reform program, AFP reported.

"One thing I will stick to is steadily carrying through the structural reform policy that I've maintained. The policy I've been advocating since I took office in day one has not changed - the only thing that has changed is the approval rating for my administration," he said.

"But my determination to carry through this policy has not changed," he said. "No pain, no growth. No pain, no gain. I am still sticking to this basic policy that there will be no growth without pain or reform."

He also told the ***FT*** his reforms should be in place within two years.

"It's been one year since I took office, but within two years reform should be firmly in place."

"I have been saying that within two to three years the NPL (non-productive loans) problem should be resolved and also the structural reform that I've been advocating should also be put on a smooth course," he said.

"Now people are supporting my policy, which is different from past policies, and legislative measures are being put in place to implement the programs and progress is being made."

Koizumi also outlined his determination to roll back the state sector.

"The biggest objective that my cabinet has set itself is to leave to the private sector what the private sector can do," he said.

"Sooner or later this year, the necessary legislation to privatize the highway corporation will go through the Diet... and also in the postal services, the necessary laws will be legislated to allow private players in that market.

"Third, we shall accelerate the disposal of NPLs so that financial institutions will regain their soundness."