TOKYO | Mon Jun 20, 2011 3:20am EDT
(Reuters) - Japanese Prime Minister Naoto Kan may announce on Monday that he will resign on condition of key bills passing a divided parliament, Kyodo news agency reported, as the government struggles with a prolonged nuclear crisis.
Kan, already Japan's fifth premier in as many years, survived a no-confidence vote earlier this month after promising critics in his own party he would quit but declined to say when. Opposition parties have declined to cooperate on key bills unless the prime minister keeps his pledge.
Kyodo said that Kan, who has come under fire for his handling of his response to the world's worst nuclear crisis in 25 years, could announce that he would quit on condition of parliament passing a second extra budget and a bill to issue bonds for this year's budget, Kyodo said.
Hopes have risen that Kan's departure would clear the way for a coalition between the DPJ and its rival Liberal Democratic Party that could break the parliamentary logjam as Japan tries to rebuild from the March 11 quake and tsunami that triggered the nuclear accident at Tokyo Electric Power Co's (Tepco) Fukushima Daiichi plant.
In theory, a coalition could also make it easier to tackle longer-term policies including social security and tax reforms, including a sales tax rise, needed to rein in public debt already twice the size of Japan's $5 trillion economy.
But obstacles to any such coalition remain high, and momentum for the tie-up appears to have diminished of late.
Japanese media have said that Finance Minister Yoshihiko Noda, who backs Kan's calls for fiscal discipline, was a frontrunner to replace Kan in a DPJ leadership race that would be held after the premier steps down.
Other potential contenders include former foreign minister Seiji Maehara, a conservative expert on security issues.
(Reporting by Chisa Fujioka and Linda Sieg; Editing by Edwina Gibbs)