Japan's finance minister, tipped as a candidate to become the country's next premier, on Saturday proposed to form a government of national unity to spearhead the country's recovery from natural disasters.

"The ruling and opposition parties must have heart-to-heart discussions with each other. That's the bottom line," Yoshihiko Noda said in a political talk show on the TV Tokyo network.

"We'd rather form a national salvation government. That'll be a coalition. Otherwise politics won't move forward," he added.

Japan's opposition camp, led by the conservative Liberal Democratic Party (LDP), controls the upper house of parliament and has blocked the smooth passage of bills pushed by the ruling centre-left Democratic Party of Japan.

Noda told reporters later that he envisaged a coalition with the LDP and the centrist opposition New Komeito Party.

Prime Minister Naoto Kan is widely expected to leave his post by the end of this month. His approval rating has dipped to around 15 percent amid criticism of his handling of the March 11 earthquake, tsunami and nuclear disasters.

Kan promised weeks ago that he would step aside once three laws are passed -- an extra budget for disaster reconstruction, a bill to help pay for it with new bonds, and a law to promote renewable energy.

The supplementary budget bill was enacted last month, and the two major parties have agreed this week to also pass the other two bills by August 26, paving the way for Kan to leave the scene.

Asked when he will formally announce his candidacy for the premiership, Noda replied: "I will make it known when the prime minister decides his course of action."

Noda, 54, is a fiscal hawk who has steered the world's number three economy through turmoil for over a year and stepped into currency markets to bring down the strong yen, which hurts exporters.

Noda signalled his candidacy with an essay titled "my government plan" in the Bungei Shunju conservative monthly on Wednesday, pledging fiscally prudent policies to whittle down Japan's public debt mountain.

But his critics see him as a puppet of powerful finance bureaucrats as he sides with them in advocating significant tax increases.

Sumio Mabuchi, who was transport minister when Japan was embroiled last year in a bitter territorial island row with China, is also seen as a possible candidate.

Public opinion polls have favoured the former high-profile foreign minister Seiji Maehara, but he has not yet announced his intention to run.

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