More than 1,300 Japanese moved to the Caribbean island nation between 1956 and 1959, a time when Japan faced intense population pressure and soaring jobless rates after millions of citizens and veterans returned home after World War Two.

A group of 177 ageing Japanese settlers filed the suit with the Tokyo District Court in July 2000, demanding the government pay a total of 3.1 billion yen ($27.4 million) in damages. Several of the plaintiffs have since died.

"The ruling was clearly unjust. The plaintiffs will appeal the case," said Shoichi Kanno, chief lawyer for the plaintiffs.

While rejecting the demand for reparations on grounds that the statute of limitations had run out, the court ruled that the government was responsible for the emigration project.

"With respect to the mortification and sufferings of the settlers, there is no statute of limitations," Kanno said.

The plaintiffs, most still living in the Dominican Republic, said the Foreign Ministry had told applicants they would receive fertile farmland, free housing and other daily necessities.

But the settlers said the land provided was less than one-third of what the government promised, and was rocky and salty and unsuited to farming.

In addition, they were not given ownership of the land but only the right to cultivate it, the plaintiffs said.

SHOCK AND DISMAY

The plaintiffs were shocked and dismayed by the ruling.

"When the presiding judge read out the text of the ruling, it came to my mind that the government of our fatherland had sent us to a small island in the Caribbean Sea and abandoned us," Toru Takegama, 68, who heads the plaintiffs' group, told reporters.

The Japanese government argued that it had provided information to potential emigrants as an administrative service and had no legal responsibility for their problems, a lawyer for the plaintiffs said.

"It was a far cry from a paradise. It was a hellish nightmare," Takegama told Reuters in an interview last week.

According to media reports, Prime Minister Junichiro Koizumi acknowledged in 2004 there had been "mismanagement" of the 1950s emigration policy.

On Wednesday, Koizumi told reporters: "In point of form the country won, but there are many things it should reflect on."

The plaintiffs urged Koizumi to take action to help.

"When I was 27, I went to the Dominican Republic, dreaming of farming on vast land in a paradise in the Caribbean Sea," said Kazumi Maruyama, 77. "It was the Japanese government who spoiled our dreams."

Foreign Minister Taro Aso said the government would examine the ruling and try to build trust with the settlers.

"Fully mindful of the fact that there were harsh criticisms about the situation in those days, we need to examine the details of the ruling," Aso said in a statement.

"The Japanese government should acknowledge its wrongdoings and apologise to us," Takegama said. "Otherwise, we will remain Japanese citizens abandoned by our fatherland."

Hidehisa Otsuji, a senior ruling party lawmaker, said Japan should change laws covering government reparations.

"I really don't understand why we had such a ruling. We have no option but to change the law," he said.

About 600 Japanese settlers came back in 1961 and 1962 when Tokyo provided them with travel expenses after Dominican Republic strongman Rafael Trujillo was assassinated.