Japan is a country that embraces English, teaches it to every student, adopts English words for everything from boyfriend to hacker, but still fails at communicating in English.

After many years of mulling over this condition, Japan is suddenly being swept by a sense of crisis, almost panic, over the nation's lack of facility with English in the Internet age.

Critics have gone so far as to label Japan a failed state for its low English proficiency, and say it will fall further behind in technology, finance and information unless more Japanese learn to speak it.

Prime Minister Keizo Obuchi last week released a report on Japan's goals for the 21st century that made national headlines with its proposal to make English the country's official second language.

"Achieving world-class excellence demands that all Japanese acquire a working knowledge of English," the report said. It called for reorganizing English classes according to level of achievement rather than grade, improving teacher training, increasing the number of foreign teachers and contracting language schools to teach English.

The need for such action is clear, according to government officials, bureaucrats and educators wrestling with the problem, because Japan scores near the bottom of all Asian countries on the TOEFL exam, the international test of English as a foreign language. The Asahi Shimbun newspaper noted on its front page Wednesday that Japan had pulled ahead of Afghanistan and Cambodia in the most recent test but had fallen behind North Korea.

The Education Ministry announced Wednesday that it had formed a panel of experts to devise measures to improve methods of teaching English. It already plans to increase the number of native English-speaking teaching assistants from 5,800 to at least 10,000 and to triple the number of language teachers it sends on three-week seminars overseas.

English listening comprehension tests have been added to high school entrance exams and the government is running a pilot program in some primary schools in which a native English speaker visits once every two weeks to give a 20 minute conversation lesson to each class.

Opponents of the government's proposal say it will be impossible for all Japanese to have a working level of English.

"English as a second language? It's absurd," said Masaharu Okamoto, an English teacher at Hibiya Senior High School, one of Tokyo's top public schools. "During the nuclear accident [last September], I read that villagers were told they must go to the tasuku forsu [task force] and I thought, 'Who can understand that?' We have Japanese phrases with the same meaning. Our society is based on the Japanese language and everyone should understand Japanese."

What's needed is diversity in the education system so Japanese who need to speak English are able to learn it, he said.

Professor Takashi Inoguchi of the University of Tokyo is one of those who describes Japan as a failed state because it flunks English, today's lingua franca. But he disagrees with the proposal to make English a second language.

"That would take a hundred years to be realized," he said. "The imperative in the age of globalization is speed." He says Japan should give up its egalitarian mentality, mass-producing a moderately well-educated work force.

"About 100 million Japanese don't speak English. That doesn't matter. What matters is that the elites speak good English. Businesses have recognized this and are moving fast. But not the bureaucracy. It's a shame."

Yoshio Terasawa, former head of Nomura Securities International in New York and author of a book called "Lack of English Ability is Destroying the Nation," believes that the vague nature of the Japanese language allows people to hide their opinions. By learning English, Japan's leaders will be forced to say what they think, he said.

For now, though, government policy is to ratchet up the English ability of the entire nation. Two of the biggest obstacles are the size of classes--set at 40 students--and the focus in secondary schools on preparing students for college entrance exams by emphasizing rote memorization, obscure grammar rules and long vocabulary lists.

"There's a false stereotype that Japanese are poor language learners," said Sean Reedy, a linguistics professor at the Maebashi Institute of Technology. He said the main problem is that students do not begin studying English until seventh grade. "You could take average American students, have them take the same number of Japanese classes a week at that age and you'd get the same amount of language ability."

Native English speakers working as teaching assistants say they typically see students only once a week for 50 minutes, and in a large group. If the school needs an extra period for another activity, English conversation class is the first to go, they say.

"The students have a positive attitude toward English but they're frustrated because it's hard and they don't have many opportunities to use it," said Moshe Cohen, 22, of Philadelphia, who teaches at a high school in Shizuoka prefecture. "And for the most part, they don't see any connection between English and their future. For the majority of kids, my classes are entertaining."

And seniors often do not take English conversation because they're too busy studying for college entrance exams, Cohen added.

CAPTION: At Hibiya Senior High School in Tokyo, students in an English conversation class invent dialogues to match pictures in a children's book.

CAPTION: Critics of Japan's education system say English conversation classes, like the one above in Tokyo, are too infrequent to help students master the language.