TOKYO (Reuters) -- The South Korean and Japanese governments are studying plans for a joint economic programme involving companies from both countries that aims to ease strains over the issue of forced Korean labour in World War Two, Kyodo news reported on Monday.

However, the Japanese government will not provide any money to the programme, in line with its position that claims overforced labour were settled in a 1965 treaty, Kyodo said, citing unnamed sources.

Japanese foreign ministry spokesman Naoaki Kamoshida told Reuters in an email that the report was "not true". South Korea and Japan have a bitter history that includes the 1910-45 Japanese colonisation of the Korean peninsula, the forced mobilisation of labour at Japanese companies and the use of "comfort women" -- Japan's euphemism for girls and women, many of them Korean -- forced to work in military brothels.

South Korea in June proposed a joint fund with Japan to compensate South Koreans forced to work by Japanese companies during the war, but Japan rejected the idea out of hand at that time.

The new programme would be set up to help drive economic development between the two nations but it would not involve any compensation for South Koreans, Kyodo said. 

Officials in the South Korean government were not available for comment. (Reuters)