Tokyo: Disaster-struck Japan is headed to record high budget spending of 96 trillion yen (USD 1.2 trillion) as the nation tackles the costs of recovery from the March earthquake and tsunami.

The Cabinet approved the draft budget for the fiscal year starting April 2012 on Saturday, covering massive costs for reconstruction in northeastern Japan as well as decontamination efforts for radiation leaked from a damaged nuclear power plant.

The government will rely on new debt for 49 percent of its annual revenue, the highest level ever, according to a news service.