Japan's cabinet on Friday approved almost $50 billion of spending for post-earthquake rebuilding, a downpayment on the country's biggest public works effort in six decades.
The emergency budget of 4 trillion yen ($48.5 billion), which is likely be followed by more reconstruction spending packages, is still dwarfed by the overall cost of damages caused by the March 11 earthquake and tsunami, estimated at $300 billion.
"With this budget, we are taking one step forward towards reconstruction ... and towards restarting the economy," said Yoshihiko Noda, finance minister after a cabinet meeting.
Unpopular Prime Minister Naoto Kan, under fire for his handling of the crisis, said Japan would have to issue fresh government bonds to fund extra budgets to come, and suggested he would stay on to oversee the process.
"I feel it was my destiny to be prime minister when the disasters and nuclear accident took place," Kan said.
"I want to work for reconstruction and rebuilding, and present an outline to overcome these two crises."
Financing the next packages will be much tougher, as they are likely to involve a mix of taxes as well as borrowing in the bond market, which could strain Japan's debt-laden economy. If Kan is unable to steer those laws through parliament, he may be forced to step down, analysts say.
The magnitude 9.0 earthquake and 15-metre (50-ft) tsunami that followed caused Japan's gravest crisis since World War Two, killing up to 28,000 people and destroying tens of thousands of homes.
It also smashed a nuclear power plant which began leaking radiation, a situation the plant's operator says could take all year to bring under control.
The budget will be submitted to parliament next week and is expected to be enacted in May.