A Japanese ruling party official says Prime Minister Naoto Kan is set to resign by the end of August after reaching an agreement with the opposition.

Kyodo news agency Tuesday quoted a senior lawmaker of the Democratic Party of Japan as saying Mr. Kan will resign after securing parliamentary passage of the second extra budget and a bill needed for the government to issue deficit-covering bonds for the fiscal year of 2011.

The government is seeking to pass the second supplementary budget in July to fund additional relief measures for the victims of the March 11 earthquake and tsunami.

The ruling Democratic Party needs opposition help because it lacks a majority in the upper house, which can block bills.