The length of the extension will be decided on Nov. 28, two days before the current Diet session expires, Prime Minister Taro Aso told reporters in Tokyo today. By keeping lawmakers in session, the Liberal Democratic Party-controlled lower house can override any attempt by the opposition Democratic Party of Japan to block legislation.

The DPJ has threatened to disrupt bills through its control of the less-powerful upper house. The party wanted the government to submit a supplementary budget to help Japan's ailing economy before agreeing to cooperate on legislation.

Aso said the government will submit the stimulus bill in the next Diet session in January to accord with budgetary procedures. Former LDP Chief Cabinet Secretary Yasuhisa Shiozaki wrote on his blog last week that blaming the delay on bureaucratic practice would ``do little to help gain the public's understanding.''

``Aso may be forced into a tight spot in the LDP,'' said Naoki Iizuka, an economist at Mizuho Securities Co. in Tokyo ``Japan had given the impression it was acting speedily,'' to address the global financial crisis, he said.

The Bank of Japan downgraded its economic assessment for the first time in three months today, as the country entered its first recession since 2001.

Election Accusation

The opposition, which wanted the stimulus bill to be introduced this session, has accused Aso of delaying the legislation to avoid calling an early election for the lower house, due by September 2009.

In protest, the DPJ has vowed to withhold an upper house decision to renew a bill authorizing naval refueling missions in the Indian Ocean to support the U.S.-led war against terror in Afghanistan. The DPJ is against the mission citing violation of Japan's pacifist constitution.

Last year an upper house rejection caused the bill to expire, forcing the ships to return to Japan temporarily until the lower house overrode the veto. The LDP-controlled lower house can interpret a 60-day refusal to deliberate by the upper house as a rejection, and to overrule it.

Public support for Aso has fallen 11 percentage points since he took office in September to 37 percent, according to an Asahi poll published Nov. 11. Thirty-three percent of respondents said they would choose the DPJ if elections were held immediately, compared with 30 percent for the LDP. No error margin was provided.

Aso's two predecessors, Yasuo Fukuda and Shinzo Abe, were forced to resign after less than a year in office because of legislative gridlock.

To contact the reporter on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net; Toko Sekiguchi in Tokyo at Tsekiguchi3@bloomberg.net