Japan's parliament enacted two key bills on Friday, clearing the way for the promised departure of embattled Prime Minister Naoto Kan.

The upper house passed into law a bill on promoting the use of renewable energy and another on issuing deficit-covering bonds, the last of the conditions Kan had set for his resignation.

The unpopular 64-year-old leader is expected to announce his resignation later Friday, paving the way for the nation's sixth premier in five years to steer a recovery from the March earthquake-tsunami disaster.

Kan's resignation would come nearly six months since the devastating March 11 quake, tsunami and ensuing nuclear crisis sorely tested his leadership and prompted accusations he mishandled the crisis.

After surviving a no-confidence vote in June, Kan said he would quit on condition that three key bills were passed -- a second budget, a budget financing bill and legislation promoting the use of renewable energy.

All three have now been cleared.

The energy law is meant to reduce Japan's reliance on nuclear power in the wake of the tsunami-triggered nuclear disaster at the Fukushima Daiichi nuclear plant.

The law adopts feed-in tariffs to press utilities to buy power generated from renewable energy sources.

The bill also aims to achieve reduce Japan's greenhouse gas emissions by 25 percent by 2020 from the 1990 level.

The bond issuance law allows the government to issue bonds that will cover 40 percent of the current main fiscal year budget, a funding bill that had been blocked by the opposition for nearly five months.

The ruling Democratic Party of Japan elects a new party president on Monday and parliament is expected to vote the leader in as premier on the following day.

Up to nine candidates could end up jockeying to succeed Kan, including the favourite, former foreign minister Seiji Maehara. Finance Minister Yoshihiko Noda may also file for candidacy when campaigning begins on Saturday.

Japan PM announces resignation as party head: media
Tokyo (AFP) Aug 26, 2011 - Japan Prime Minister Naoto Kan on Friday announced his resignation as president of the Democratic Party of Japan, Japanese media reported, effectively ending his tenure as Japanese leader.

"I resign as the (party) president effective today," Kan told senior party officials, Jiji press quoted him as saying.

The long-expected move paves the way for the election of the nation's sixth premier in five years as Japan looks to safeguard a recovery from the March 11 earthquake, tsunami and a an ongoing nuclear crisis.

A leadership election for a new party president, who would then become prime minister, is expected on Monday. Parliament will then vote the leader in as premier on Tuesday next week.

"I will leave the post of prime minister once the new leader is decided," Kan said, according to Jiji. Kan was scheduled to hold a press conference later on Friday.

After surviving a no-confidence vote in June, Kan said he would quit on condition that three key bills were passed -- a second budget, a budget financing bill and legislation promoting the use of renewable energy.

The final two bills were passed on Friday, clearing the way for him to step down.

Up to nine candidates could end up jockeying to succeed Kan, including the favourite, former Foreign Minister Seiji Maehara. Finance Minister Yoshihiko Noda may also file for candidacy when campaigning begins on Saturday.

Whoever wins faces the unenviable task of overseeing Japan's biggest post-war reconstruction, resolving of the world's worst nuclear crisis since Chernobyl 25 years ago and shielding the economy from a soaring yen.

They must also unite a divided parliament and win market confidence that Japan can overcome a legislative quagmire to address the world's biggest debt.

Ratings agency Moody's this week downgraded Japan, citing its revolving-door political leadership as a major obstacle to much needed reform.

After taking office in June last year, the 64-year-old Kan struggled amid low support ratings, a power struggle within the DPJ and a divided parliament in which the Liberal Democratic Party opposition blocked various bills.

Japan's triple disaster -- which left 20,000 dead or missing, wiped out whole towns and sparked the Fukushima nuclear accident -- tested his leadership and led to accusations that he bungled the response to the calamity.

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