JAKARTA (REUTERS) - Indonesia's state enterprise ministry will decide whether to award China or Japan a contract to build the first high-speed railway in Southeast Asia's largest economy, President Joko Widodo said on Thursday.

The contract for a 150km rail line linking Jakarta, the capital, with the southern textile hub of Bandung has provoked stiff rivalry between the two Asian giants. "I have decided that we will not burden the state budget, and there will be no guarantee from the government, so I defer to the SOEs (ministry)," Widodo told reporters.

Senior members of his cabinet earlier made a recommendation to Widodo on the choice of bid, after weighing assessments by an independent consultancy.

Two government sources have said Indonesia is leaning toward awarding the multi-billion dollar contract to China because its proposal is seen as "less financially burdensome".

State Enterprises Minister Rini Soemarno, who is seen as being close to Beijing, has said the Chinese bid would not drain government coffers, telling reporters on Wednesday, "There is truly no burden on the government." If China were to win the contract, state-owned companies PT Wijaya Karya, PT Jasa Marga, PT Kereta Api, and PT Perkebunan Nusantara VIII would be involved in the consortium with China, Soemarno said.