CORRECTED-UPDATE 1-Japan PM wants basic policy on new digital agency by year-end - Media

(Corrects analyst's name in final paragraph)

TOKYO, Sept 23 (Reuters) - Japanese Prime Minister Yoshihide Suga said on Wednesday he wanted to compile a basic policy on a new digital agency by the end of this year and submit the bills to next year's ordinary session of parliament, local media reported.

Creating an agency to speed up the digitalisation of Japan's outdated government administration has been a key pledge of Suga, who was elected premier last week.

While the government has made "digital transformation" its main policy plank this year, the switch has proved difficult due partly to a vertically structured bureaucracy that hampers efforts to use common platforms for administrative work.

"We need to make an organization with personnel of high ability from public and private sectors, which would lead digitalization in the overall society," the Nikkei quoted Suga as saying.

"I want to accelerate discussions to do so, compile basic policy by the end of this year and submit necessary bills to next ordinary session of parliament."

Suga has pledged to make sweeping changes to overcome the digital woes, which were blamed for delaying delivery of cash payouts to help citizens weather the impact of the novel coronavirus.

Takuya Hirai, digital transformation minister, said on Friday that Suga had told him to accelerate preparations for setting up new digital agency. And he and government officials met over the weekend to discuss the digital agency.

"Japan needs to raise its potential growth rate by digitalization," said Takuto Murase, senior economist at Japan Research Institute. (Reporting by Kaori Kaneko; Editing by Chris Gallagher and Michael Perry)