A man walks near a damaged power pole at an area that was devastated by the March 11 earthquake and tsunami, in Watari, Miyagi prefecture, April 22, 2011. [Photo/Agencies]

TOKYO -- Japan's cabinet approved on Friday almost $50 billion of spending for post-earthquake rebuilding, a downpayment on the country's biggest public works effort in six decades.

The emergency budget of 4 trillion yen ($48.5 billion), which is likely be followed by more reconstruction spending packages, is still dwarfed by the overall cost of damages caused by the March 11 earthquake and tsunami, estimated at $300 billion.

"With this budget, we are taking one step forward towards reconstruction ... and towards restarting the economy," Finance Minister Yoshihiko Noda told reporters after a cabinet meeting.

The magnitude 9.0 earthquake and 15 metre tsunami that followed caused Japan's gravest crisis since World War Two, killing up to 28,000 people and destroying tens of thousands of homes.

It also smashed a nuclear power plant which began leaking radiation, a situation the plant's operator says could take all year to bring under control.

Markets are keeping a close eye on how much the government will borrow to fund reconstruction. Though it kept its promise not to issue new bonds to finance this tranche of spending, additional bonds are expected to pay for rebuilding budgets to come.

Though Japan's debt is around twice the size of its $5 trillion economy, it does not face a Greece-style debt crisis since most of that debt is owed to domestic creditors rather than foreign banks.

The budget will be submitted to parliament next week and is expected to be enacted in May.

Members of the Japan Self-Defense Force, wearing protective suits, gather at an area that was devastated by the March 11 earthquake and tsunami, in Higashi-Matsushima, Miyagi prefecture, April 21, 2011. [Photo/Agencies]