The Olympus group's medical products arm said it had developed key technologies for the capsule endoscope, which would navigate through the body without batteries to take images and directly administer drugs.

Olympus Medical Systems said the capsule, which is 2.6 centimetersinches) long and 1.1 centimeters in diameter, could also extract body fluid for analysis and do ultrasound scanning from inside the body for clearer images.

The capsules are powered by a rotating magnetic field and would free patients from the painful ordeal of swallowing an endoscope with fibre-optic cables.

"Inside the capsule there is a deflated balloon containing drugs fitted with a small valve that can be controlled by communications from outside the body," allowing drugs to be delivered, the company said in a statement.

"There is also a negatively-pressured space within the capsule for storing extracted fluid," it said.

Olympus, which controls about 75 percent of the world's endoscope market, said it was to conduct clinical tests soon, with news reports saying the product was likely to be launched within two years.

Another Japanese company, RF System lab, claims to be the world's first developer of a battery-free capsule endoscope.

Its product, named Norika3 after sexy Japanese actress Norika Fujiwara, is also no bigger than a fingertip at 2.3 centimetres (0.9 inches) in length and nine millimeters in diameter, and capable of wireless control.

RF System expects to get approval for use in China in early 2005 amid experiments at hospitals in China and Hong Kong, a company spokesman said.

"We hope to launch sales in China as soon as we get the approval," the spokesman said, adding that China already allowed battery-powered capsule endoscopes made by Given Imaging of Israel.

The market price for Norika3 would be about 5,000 yen (48 dollars) each. RF System also plans to file for approval with the US Food and Drug Administration next year before applying in Japan.

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