Japanese Prime Minister Naoto Kan on Friday announced his resignation as president of the Democratic Party of Japan, paving the way for the nation's sixth premier in five years.

By stepping down, Kan effectively ended his turbulent time in power during which he was criticised for his response to Japan's worst post-war crisis following the March 11 earthquake, tsunami and Fukushima nuclear accident.

"I propose to you that I resign as the leader of the Democratic Party of Japan today," Kan told party lawmakers Friday.

"Once a new leader is elected, I will resign promptly as prime minister and my cabinet will resign en masse."

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.

A relaxed Kan reflected on his time leading Japan in its worst post-war crisis. "I believe I did my best and did what I had to do in severe conditions," he said.

He added that he would continue to work on nuclear-related issues as a politician and pursue "a society that does not rely on nuclear plants".

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 budget for reconstruction in quake-hit areas was approved in July, while the final two bills were passed 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.

Maehara, 49, who stepped down as foreign minister in March over a donation row, could become Japan's youngest post-war prime minister. He has advocated the pursuit of growth instead of raising taxes to ease Japan's fiscal woes.

Noda -- who recently gave statements supporting war criminals -- has softened his earlier stance on hiking taxes.

Between candidates such as Maehara and the premiership stands party kingmaker Ichiro Ozawa, who controls the DPJ's biggest political faction.

Ozawa, a divisive figure who faces criminal trial over a donations scandal, leads a group of roughly 130 lawmakers out of the 398 who can vote on Kan's replacement.

Kan lasted just over 14 months in power. The 64-year-old 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.

The deadlock helped erode high early expectations of him as the first leader in years not born into a political dynasty, as the DPJ failed to meet its election pledges.

Japan's triple disaster -- which left 20,000 dead or missing, wiped out towns and sparked the Fukushima nuclear accident that forced the evacuation of tens of thousands -- arguably gave Kan another lease of life.

But to the dismay of voters, a short-lived political truce gave way to renewed bickering and infighting within about a month.

Charges that Kan had bungled the response to the calamity, as authorities delayed admitting that the nuclear crisis was worse than initially thought, quickly grew louder.

The lame-duck leader later advocated a nuclear-free future for Japan in defiance of the power companies, bureaucrats and politicians who make up Japan's so-called "nuclear village", making more enemies along the way.

The message tapped into popular sentiment, with some polls saying 70 percent of Japanese want to phase out atomic power, but was not enough to revive his own tumbling ratings.

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