Japanese carmaker Toyota and US giant General Motors (GM) are planning on embarking on a fuel cell venture together in order to further the emissions-saving technology.

Three executives from the two companies have confirmed that a project will be set up in the US, beginning with a research centre and possibly expanding to a factory.

The two companies, ranked first and second in the world, already cooperate on research and development in environmentally friendly technologies.

However they hope the new venture will help them to reduce the costs of researching and developing the new technology.

"Fuel cells will be one technology that the two companies can work on together,' said Koji Endo, an analyst at Credit Suisse First Boston in Tokyo, told Bloomberg.

"It makes sense for them to cooperate on future technology like fuel cells which is costly.'

The two companies have earmarked a reported $20 billion between them for capital expenditure and research, which would cover alternative fuel projects.

The new venture forms part of GM's plan to produce commercially viable fuel cell vehicles by 2010.