Up to 10,000 Japanese spectators will be allowed at Tokyo 2020 Olympic venues, despite warnings from health bosses, it was announced on Monday.
Overseas visitors have already been banned but organisers revealed Japanese fans could attend providing crowds do not exceed 50 per cent of a venue's capacity.
The Olympics are scheduled to begin on July 23, while the Paralympics follow a month later from August 24, but those fans allowed to attend will not be permitted to shout and will have to wear masks.
The limit for the Games, scheduled to begin on July 23, "will be set at 50 per cent of venue capacity, up to a maximum of 10,000 people", organisers said in a statement.
Numbers could be further reduced after July 12, depending on whether emergency Covid-19 measures, due to expire the day before, are extended or due to any other anti-infection measures in force at the time.
The national stadium, built for the 1964 Tokyo Olympics and due to host athletics and football, would have held 68,000 fans but now will be at less than 15 per cent capacity.
Some of the country's top health experts said banning spectators would be the least risky option.
"It would be preferable to have no audience from the standpoint of infectious disease control," Haruka Sakamoto, a physician and researcher at Keio University, said before the decision.
"I am concerned not just about the increase in the number of people coming to watch the Olympics itself but also about the loosening of people's sense of urgency by hosting the Olympics with spectators."
However, Tokyo 2020 President Seiko Hashimoto said: "There are so many cases, domestically and internationally [of] sports events with spectators.
"By exercising thorough measures and based on the government criteria, we believe we can hold the Games with spectators.
"The entire world is facing the same issues and we have to work together to overcome them."
The announcement followed five-way talks among Tokyo 2020 organisers, the Japanese government and that of the capital, Tokyo, and the international Olympic and Paralympic committees.
Before the meeting, IOC President Thomas Bach said the vaccination rate for athletes and officials residing in the Olympic Village was now "well above 80 per cent", exceeding the IOC's initial expectations.
Prime Minister Yoshihide Suga has said he would not rule out holding the Summer Olympics without spectators if the capital was under a state of emergency for Covid-19.
"In the event a state of emergency was declared then we can't rule out not having spectators," he told reporters during a tour of vaccination sites in Tokyo on Monday.
Last week, Suga decided to lift a coronavirus state of emergency for Tokyo and eight other prefectures that had suffered a resurgence.
The government retained less tough curbs for seven of the nine prefectures, including Tokyo, until July 11, less than two weeks before the Games are set to open.