By Rob Taylor

CANBERRA, Jan 27 (Reuters) - A deal allowing Japan to hunt whales near home in exchange for scaling back its Antarctic whale hunt was only a distant possibility, Australia said on Tuesday, as anti-whaling activists called for any pact to be rejected.

Under the draft proposal, Japan would be permitted by the International Whaling Commission (IWC) to hunt whales near its shores if it cut the number of Antarctic minke whales it kills each year, U.S. and Australia media have reported.

IWC Chairman William Hogarth has been working on a pact allowing Japan's whalers to hunt whales in the North Pacific in exchange for phasing out Antarctic hunting, or imposing a strict cap on the number of whales culled, said the reports.

"There is no formal proposal as such, but it's quite clear from reports that we have seen coming out of the IWC that suggestions of this nature have been made at officials level," Australia's Foreign Minister Stephen Smith told local radio.

"But that's a long way from the Australian government agreeing to them," Smith said.

Japan's Fisheries Agency has declined to comment.

Commercial whaling was banned under a 1986 treaty. But the Japanese government has continued what it calls scientific whaling, despite criticism from anti-whaling countries like Australia, Britain and New Zealand.

The compromise proposal was hammered out in confidence by an IWC drafting group of six nations, including Australia and Japan, at a meeting in Cambridge, England, last month, The Age newspaper said on Tuesday. Other countries involved in the talks included the United States, Sweden, Brazil and New Zealand.

Smith said Australia still hoped to try to convince Japan to end whaling at an upcoming IWC meeting in March, at which the draft proposal would be discussed.

"Our priority remains Japan ceasing whaling in the Great Southern Oceans, and our overall objective is for whaling to end completely," Smith said.

But Green groups accused Australia's centre-left government of moving towards resumption of commercial whaling to avoid damaging the country's $35 billion Japan trade relationship.

"This is Whalergate," Patrick Ramage, global director of the International Fund for Animal Welfare's whale programme, told the Age. "We would hope and expect Australia to take the lead in ending scientific whaling."

The Australian Greens, who hold balance of power in Australia's upper house, said the "secret whale slaughter deal" was more about appeasement than protection, and would help Japan launch many more whaleboats. Australia sent a customs patrol ship to Antarctica last year to gather photo evidence of the Japanese cull to use in a possible International Court of Justice challenge, but has sought a diplomatic solution instead of court action.

Japan's whaling fleet is currently engaged in its annual Antarctic whale hunt, aimed at catching about 900 whales.

Japan has frequently threatened to quit the IWC, but has denied the country would be better off if the IWC were to collapse. The group is set to hold its 61st annual meeting in Madeira in June. (Reporting by Rob Taylor; Editing by Jerry Norton)

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