Prime Minister Junichiro Koizumi and his two coalition partners agreed Wednesday to compile a 2.5 trillion yen second extra budget for this fiscal year to prop up the ailing economy, lawmakers of the coalition parties said.

Koizumi, New Komeito party leader Takenori Kanzaki and New Conservative Party head Takeshi Noda also agreed to submit the budget to the next regular Diet session, which will begin in January, and to finance the budget through the sales of Nippon Telegraph and Telephone Corp. shares, the lawmakers said.

The three leaders decided the budget should finance projects in seven priority sectors chosen by the premier as key in compiling the fiscal 2002 budget, they said.

The total scale of the project is expected to be worth 4 trillion yen, they said.

The seven sectors are the environment, Japan's aging society, urban development, regional revitalization, science and technology, human resources development, and information technology.

The leaders agreed to finance the budget through the sales of the NTT shares after Koizumi told them he wants to keep his pledge to limit fresh government bond issuance to 30 trillion yen from the current fiscal year, they said.

Koizumi has pledged to limit the issuance of new bonds as part of efforts to reign in the nation's huge public debt.

Last Friday's enactment of a 3 trillion yen supplementary budget for fiscal 2001 brought the total issuance of new government bonds for the current fiscal year to the 30 trillion yen mark.

Kanzaki said that although he personally thinks sticking to the 30 trillion yen mark is unnecessary, he will respect the premier's decision.

The New Komeito leader also said the second extra budget is necessary because the 3 trillion yen extra budget enacted Friday is insufficient to prevent Japan's economy from deteriorating further.