A Japanese government-backed fund will spearhead a plan to merge the lithium-ion battery businesses of Sony and other major firms in a bid to safeguard cutting-edge technology, a report said on Friday. The Innovation Network Corporation of Japan (INCJ) has started work on the integration of Japanese ventures, with the consumer electronics giant at the core of its plan, the Yomiuri Shimbun reported, citing unnamed sources. Under the plan, the most likely merger partner for Sony Energy Devices is a joint venture established by Nissan and NEC, called Automotive Energy Supply, the paper said. The move is aimed at safeguarding the technological edge Japanese firms have developed in the face of increasingly intense competition from South Korean firms, it said. Lithium-ion batteries are used in various products, ranging from electronic gadgets such as laptop computers and mobile phones to electric cars. Much larger and more powerful lithium-ion batteries are at the centre of a probe into the emergency landing of a Boeing Dreamliner last week, which resulted in the worldwide grounding of 787s. The INCJ is currently mediating talks between Sony and the Nissan and NEC joint venture. They are working on a plan that would see Sony sell its majority share in its battery unit to Nissan and NEC, while the INCJ would also invest in the merged firm, the Yomiuri said. The INCJ will seek other merger partners among Japanese firms if the talks do not result in an agreement, it said. A Sony spokeswoman and an INCJ official both declined to comment on the report. Sony is undergoing painful restructuring after the maker of PlayStation game consoles and Bravia televisions lost a whopping 456.66 billion yen ($5 billion) in its last fiscal year. Its massive reorganisation includes selling off its chemical division while investing 50 billion yen in camera and medical equipment maker Olympus, and selling its US headquarters in Manhattan for $1.1 billion. Last year, the firm said it would cut about 10,000 jobs and spend nearly $1.0 billion on an overhaul designed to shake up its product line and cut costs, which its chief Kazuo Hirai described as \"urgent\".