Japan's ruling party is considering proposals to revise the law to let women take the throne, according to a draft seen by local media.
Princess Masako has been under pressure to bear a male heir
The proposal comes amid mounting unease that the current heir to the throne and his siblings have no male children.
The proposal is part of a wide-ranging review of Japan's constitution and law.
Also under discussion are controversial changes to extend the military's ability to act defensively when serving in missions overseas.
Analysts believe pressure on Princess Masako - the wife of the current heir to the throne - to bear a male heir has contributed to stress-related illnesses which have keep her out of the public eye for nearly a year.
PACIFISM UNDER THREAT?
Japan's constitution renounces the use of force
This has been stretched to allow self-defence troops
1992 law allowed troops to join UN and relief work overseas
2003 law said troops could go to non-combat zones in Iraq
PM Koizumi wants to give Japan even greater powers
A draft proposal by the LDP, obtained by the Yomiuri Shimbun newspaper, recommends that inheritance now be hereditary, regardless of gender.
The LDP draft also makes a number of proposals regarding Japan's security, including allowing the military to engage in collective self-defence.
At the moment, Japanese troops - known as the Self Defence Force - who are stationed abroad, are only allowed to shoot to protect themselves.
The LDP proposal would extend that to let them shoot to protect their allies too.
The Daily Yomiuri said that the LDP plans to decide on the changes next month, and announce a final draft in November 2005.
For the military changes to become law, they require a two-thirds majority vote in both houses of parliament and a majority in a public referendum.
A change to the Imperial Household Law to allow female succession only requires approval by parliament.
The country's defence provisions are also being scrutinised by the government. Kyodo news agency has obtained a draft of the National Defence Programme Outline which sets out wide-ranging revisions, and is expected to be approved by the cabinet in late November.
The document recommends extending SDF humanitarian missions abroad and mentions concern about China for the first time.
It also suggests easing Japan's ban on arms exports, to aid co-operation with the US.
Both sets of recommendations are controversial because they would involve changes to the wording of the pacifist Article 9 of the constitution. At the moment, this officially bars Japan from even having an army or navy.
But the BBC's correspondent in Tokyo, Jonathan Head, says public sentiment has shifted and many Japanese now believe the constitution's restrictions on the use of armed force are out-dated.
Opinion polls do suggest, however, that most of the public wants the spirit of Article 9, which renounces the use of war to settle international disputes, to remain unchanged.
Any changes at all are likely to alarm Japan's neighbours in the region, still scarred from the effects of Japanese militarism during World War II.