The Japanese government is proposing record spending next year and raising bond issuance by a third in its draft budget as it attempts to prevent the economy from falling further into recession.

The Ministry of Finance, which unveiled the budget proposal over the weekend, wants to increase spending by 6.6 per cent to Y88,548bn ($991bn, €712bn, £664bn) in the year starting in April 2009, which would be the largest amount for an initial budget proposal.