Critics see parallels between the new law and Abe's drive to revise Japan's U.S.-drafted, post-war constitution to stress citizen's duties over civil rights, part of a conservative agenda that includes a stronger military and recasting Japan's wartime history with a less apologetic tone.
"There is a demand by the established political forces for greater control over the people," said Lawrence Repeta, a law professor at Meiji University. "This fits with the notion that the state should have broad authority to act in secret."
Abe says the new law, a draft of which was approved by his cabinet on Friday and should be passed by parliament in the current session, is vital to his plan to set up a U.S.-style National Security Council to oversee security policies and coordinate among ministries.
Outside Abe's official residence, several dozen protesters gathered in the rain in a last-minute appeal against the move.
"Basically, this bill raises the possibility that the kind of information about which the public should be informed is kept secret eternally," Tadaaki Muto, a lawyer and member of a task force on the bill at the Japan Federation of Bar Associations, told Reuters.
"Under the bill, the administrative branch can set the range of information that is kept secret at its own discretion."
Media watchdogs fear the law would seriously hobble journalists' ability to investigate official misdeeds and blunders, including the collusion between regulators and utilities that led to the 2011 Fukushima nuclear disaster.
A probe by an independent parliamentary panel found that collusion between regulators and the nuclear power industry was a key factor in the failure to prevent the meltdowns at Tokyo Electric Power Co's (Tepco) tsunami-hit Fukushima plant in March 2011, and the government and the utility remain the focus of criticism for their handling of the on-going crisis.
Tepco has often been accused of concealing information about the crisis and many details have first emerged in the press. In July, Tepco finally admitted to massive leaks of radiation-contaminated water into the Pacific Ocean after months of media reports and denials by the utility.
"This may very well be Abe's true intention - cover-up of mistaken state actions regarding the Fukushima disaster and/or the necessity of nuclear power," said Sophia University political science professor Koichi Nakano.
Legal experts fear a broad impact on the media's ability to act as a watchdog. "It seems very clear that the law would have a chilling effect on journalism in Japan," said Meiji University's Repeta.
Critics have dismissed as political window dressing the addition of references to freedom of the press and the right to know, which were added to the bill at the insistence of the LDP's junior coalition partner, the New Komeito party.
"As things stand, the state gets a more or less free hand in deciding what constitutes a state secret and it can potentially keep things secret forever," Nakano said.
Currently, only defense secrets are subject to such classification. Security experts say that makes defense officials reluctant to share classified data with other ministries, a pre-requisite for the functioning of the planned National Security Council.
Under the new law, public servants and others cleared for access to such information could get up to 10 years in prison for leaks. At present, they face one year imprisonment except for defense officials, who are subject to up to five years in prison or 10 years if the data came from the U.S. military.
Journalists and others in the private sector who encourage such leaks could get up to five years in jail if they used "grossly inappropriate" means to encourage leaks.
(Writing by Linda Sieg; Editing by Raju Gopalakrishnan)