The Japanese government has said the size of the extra budget for the first phase of the public relief and rebuilding effort following the March 11 earthquake and tsunami could reach about Y4,000bn ($47bn) – double some previous suggestions.

The initial overall cost of reconstruction after the disaster is estimated to be as much as Y25,000bn, according to the cabinet office. Of that, economists believe, the government will have to find at least Y10,000bn in the next 12 months to fund its part of the reconstruction effort. The private sector would fund the rest.

Economists believe the government will easily tap existing funds, including contingency reserves, to pay for the initial extra budget. But one of the most crucial questions is how the most indebted country in the world will find money for the remaining rounds – at least Y6,000bn, estimates suggest.