The scheme -- a new version of the Colombo Plan that brought 20,000 Asian students to study in Australia between 1951 and 1980 -- could be unveiled by John Howard as early as this week.
The biggest overseas education plan funded by Canberra is expected to be one of Australia's most tangible contributions to the concept of an East Asian Community, which will be discussed at this week's ASEAN and East Asian summits.
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Senior government sources said the Government hoped that the new scholarships would build on the huge success of the 55-year-old Colombo Plan.
Many Colombo Plan students who studied at Australian universities have gone on to become leaders in their countries.
While the plan, one of the world's longest-running multilateral aid programs, still operates, Australia's focus under the scheme has shifted since the 1970s to technical co-operation projects, such as drug programs, rather than higher education scholarships.
The Government's new scholarship scheme will focus on existing Colombo Plan countries, which include Afghanistan, Pakistan, India, Bangladesh, Burma, Indonesia, Vietnam and Japan.
It is also expected to include provision for Australian students to study in Asia.
The initiative forms a key part of Canberra's strategy to be recognised as a full member of any institutionalised East Asian grouping, which might evolve from the inaugural summit in Kuala Lumpur.
