Nothing is safe from the machine. In the days when flesh-and-blood humans staffed Japanese love hotels, bashful couples stood by the reception as a liver-spotted hand slid a key out from beneath a curtain and a croaky voice announced a room number. For some, being served by granny was a libido-killing moment.

But punters are increasingly spared such embarrassing encounters. A push-button computer panel displays vacancies and a female-voiced vending machine inside each room times the love-making session, while automatically locking the door. The only way out is to pay the machine (or start a fire).

'I prefer this way because it's more private,' says 23-year-old Yuki Nakamura, a regular visitor with her boyfriend to hotels around the west Tokyo area. 'It used to make me feel uncomfortable if I had to see the person behind the counter. Besides, machines don't make mistakes the way people sometimes do.'

In the future, Nakamura may not even have to carry money on her date. Several are working on a mobile phone-operated payment system that will charge the cost of purchases to her monthly phone bill. The cashless love-hotel vending machine may be added to the list of innovations from a country that gave the world the Walkman, the heated toilet and the pot noodle.

Convenience, service, attention to detail and smart technology - it's what, for some, make Japan the template 21st-century society, a country that struggles like no other to dull the friction of modern life and cherishes Sartre's dictum that 'hell is other people'.

The Japan Vending Machine Manufacturers Association says the industry clocked up sales last year of about seven trillion yen - larger than the entire GDP of several small countries. The machines have become so dominant that they're widely blamed for killing off the 2,000-yen bill because engineers were too slow to modify vending machines to accept them.

Few places are more than a short walk from a ubiquitous humming neon box selling everything from rice to porn: country lanes, forests, beachfronts; even the top of Mount Fuji. Vandalising is rare and the machines are invariably well stocked.

Engineers see the electronic vendor as one of the solutions to Japan's looming population crisis. With 19,000 fewer Japanese born last year than the year before, the machine is increasingly providing services that in other advanced countries is performed by immigrants. In cities such as Osaka, some machines have even been programmed to talk in local dialects to humanise them.

The vending box has been around for 100 years, but exploded in popularity after the introduction of 100-yen coins in the 1960s. But despite their dominance, clouds have gathered over the industry. Although there are always new additions to the smorgasbord of fare on offer (such as a recent craze for green tea), the mainstay market for drinks is saturated and has been flat for a decade.

The industry is an environmental nightmare, spewing out millions of cans and plastic bottles and tonnes of coolant gases, and consuming the equivalent of more than the output of a one-megawatt nuclear power plant every year. And Japan's 620,000 cigarette machines - 40 times the US figure - are blamed for fuelling the epidemic of underage smoking in a country with the fourth-highest smoking rate in the world. A recent government survey found that more than two-thirds of high school children buy their first cigarette from a machine.

This being Japan, hi-tech help is at hand. Coca-Cola Japan, which owns almost a million vending machines, has developed a low-emission, eco-friendly model and says it will phase out older machines by 2020. Suntory and Kirin is following suit, helped by the big manufacturers Matsushita and Fuji Denki. Matsushita has launched a machine that uses 30 per cent less electricity. Meanwhile, in a bid to head off growing pressure from the World Health Organisation, the Japanese tobacco industry (which is heavily backed by the government) has developed an ID-card system for purchasing cigarettes. The system has gone on trial on a remote island off the coast of Kyushu, which has about 170 machines catering to 8,000 smokers.

The results are mixed - arrests for underage smoking down by just seven after a year of trials. 'It won't stop youngsters who really want to smoke because they can always get hold of their parents' ID cards,' says Sagamihara City convenience store owner Kenichi Sato. Still, by 2008 every machine is supposed to be equipped with some sort of age-verification system. The stakes are high: thousands of vending machines selling alcohol were taken off the streets until an age-verification system could be developed.

But some in the industry are focusing on the big prize: finding a way to link vending machines with almost 90 million mobile phones in Japan. Phones are already widely used to buy concert tickets, book restaurants and scan ticket barriers in train stations and, by 2008, about 40 million Japanese may be using them as part of what's called the cashless society, according to think-tank the Japan Research Institute.

It was only a matter of time before mobile phone and vending mahcine were joined in technological harmony.

Coca-Cola Japan launched a pilot scheme four years ago, allowing mobile phone subscribers to buy directly from 2,100 strategically placed machines. The phone is swiped over an electronic reader like a supermarket barcode checkout, and the customer is later billed for the purchase. Organised with telecom giant NTT, the service has taken off and Coca-Cola plans to convert 20 per cent of its vending machines within three years.

'Mobile-phone purchasing is the way of the future,' says Takashi Kurosaki, secretary general of the Japan Vending Machine Manufacturers Association. 'We expect this to grow and grow.'

Vendors love the system because they can track the preferences of consumers. Coca-Cola spokesman Kota Takasugi says: 'It allows us to send information to the consumer on their cell phone such as samples of new products, and we can also learn what sort of products they like.'

The technology is admired by the police, who would like to be able to simply read the billing addresses of underage drinkers and smokers rather than have to track them down.

Anything that increases convenience in the busy, gadget-mad country is likely to get the thumbs-up from consumers, especially youngsters who have grown up with vending machines and already use mobile phones like a third hand. 'My phone is the only thing I carry with me every day,' says university student Tomoko Ishibashi. 'I think it's a great idea, but I just hope I don't end up getting a huge bill at the end of the month.'

One day, the sweet-talking love hotel vending machines may merge with their cashless cousins and send the last of those granny proprietors into retirement. Not that anything would surprise her after years working in an industry that has a well-stocked supply of sex toys in each room - from a vending machine, of course.