The government is aiming to create an agency to oversee the reconstruction of disaster-hit areas in the northeast before the first anniversary of the Great East Japan Earthquake, Prime Minister Yoshihiko Noda said.

“We will move forward with preparations to launch the agency before March 11,” Noda said Thursday in the Diet, as long as bills to establish the body are passed during the extraordinary Diet session through Dec. 9.

The envisioned agency would draft reconstruction plans and coordinate overall efforts, including budget allocations and subsidies to municipalities. The agency would nominally be headed by the prime minister but be administered by the minister in charge of postdisaster reconstruction.

The legislation, however, looks certain to be revised, as the ruling Democratic Party of Japan the same day told the Liberal Democratic Party and New Komeito that it will accommodate their requests regarding the new agency.

The two largest opposition parties have called for the new body to be given greater powers, allowing it to oversee the entire rebuilding process from policymaking to implementation.

The government requires the opposition camp’s support to enact the bills because opposition parties control the House of Councilors and can block legislation sponsored by the DPJ.

Fourth extra budget

Prime Minister Yoshihiko Noda is set to instruct officials to compile a fourth extra budget for fiscal 2011 totaling around ¥2 trillion and aimed at beefing up emergency programs in devastated Tohoku, ruling party lawmakers said.

It would be the first time since 1947 that a government has drawn up four supplementary budgets in a single year.

The Democratic Party of Japan-led government is expected to draft the fourth extra budget for the current fiscal year by the end of December, and try to pass the bill at the start of the ordinary Diet session that commences in January, the DPJ lawmakers said.

The additional spending would mainly fund relief programs, including financial assistance for victims of the March 11 disasters who have had to take out additional loans — on top of their existing debts — to cover living or business expenses.

The government is unlikely to issue new bonds to finance the latest supplementary budget and could instead fund it through excess money originally set aside for servicing existing debt, as well as tax revenue and reserve funds for the current fiscal year.

Last week, the Diet enacted a third extra budget worth ¥12 trillion. The first two supplementary budgets for fiscal 2011, which ends March 31, totaled ¥4 trillion and ¥2 trillion.