Japan's parliament on Monday enacted a $25 billion extra budget to pay for relief and rebuilding after the March 11 quake-tsunami, as Prime Minister Naoto Kan faced mounting pressure to resign.
Earlier in the day a ruling party heavyweight suggested Kan could be closer to stepping down with the budget enacted.
The upper house approved the two-trillion-yen second extra budget for fiscal 2011 following its passage through the lower house on Wednesday, a parliament spokesman said.
The budget, seen as a stop-gap measure between the initial 4 trillion yen package passed in May and a third extra budget estimated to be around 10 trillion yen, was supported by the ruling Democratic Party of Japan (DPJ) and the main opposition Liberal Democratic Party and its partner New Komeito.
The government has estimated costs resulting from damage from the disasters at 16.9 trillion yen, but this does not include expenses associated with the crisis at the crippled Fukushima Daiichi nuclear power plant.
The budget sets aside 800 billion yen in reserve for reconstruction and 275 billion yen for the nuclear crisis, including compensation for victims and health checks for local residents.
The government will use surplus funds from last year to pay for the budget to avoid having to issue new bonds, as Japan already faces the industrialised world's largest public debt at around 200 percent of GDP.
Kan's administration has faced heavy criticism for not acting swiftly enough to help victims of the earthquake and tsunami that devastated Japan's northern Pacific coasts, with his approval ratings limping below 20 percent.
The premier survived a no-confidence vote in June by promising to resign at some point in the future, and has since indicated that he will step down if three key bills, including the budget, are enacted.
His government is also seen to be slow in dealing with the nuclear crisis that has forced tens of thousands to evacuate their homes and caused a widening food contamination scare.
Earlier Thursday Yoshito Sengoku, deputy chief cabinet secretary and heavyweight of the ruling DPJ, signalled Kan's resignation is near following the enactment.
"Since the second supplementary budget is being passed, (Kan) is now in a position to make decisions and take action," Sengoku told reporters, referring to Kan's resignation.
The two other bills Kan has raised as conditions for his resignation are legislation to allow the government to issue deficit-covering bonds and to promote the use of renewable energy sources.
The two bills may pass in the current parliament session that runs through the end of August, local media reported.
A Kyodo News poll released Sunday showed that Kan's approval rating plummeted to 17.1 percent, his lowest ever.