Japan's government will not put a cap on the liabilities faced by Tokyo Electric Power Co (TEPCO) for damages stemming from its crippled Fukushima Daiichi nuclear power plant, Chief Cabinet Secretary Yukio Edano said on Monday.

Under Japanese law, the operator of a nuclear facility can be granted an exemption from damages caused by a reactor if the accident was deemed to have been triggered by "a grave natural disaster of an exceptional character".

Edano, responding to a question on the issue in a parliamentary committee, said the March 11 earthquake and tsunami that tore through the Fukushima Daiichi plant should not qualify for that exemption because a disaster of that scale had happened before and the risk of it occurring was known.

TEPCO, Asia's largest utility, has started making compensation payments to residents and local governments near the plant who were forced to evacuate. But it has yet to determine how much it will have to pay in total. The Bank of America-Merrill Lynch estimated the bill could reach $130 billion if the crisis continues.

The Japanese government is working on a plan to help TEPCO with compensation. However, while frustrations over the government's response are mounting and a nuclear crisis is still unfolding, the increasingly unpopular government is being threatened as more financing battles lie ahead.

Japan's parliament passed on Monday a 4 trillion yen ($50 billion) emergency budget for disaster relief after the March 11 earthquake and tsunami, but it will cover only a fraction of the cost, which was the most expensive disaster ever.

The overall fiscal damages to the nation caused by the devastating twin disaster are estimated at total $302 billion.

According to NHK, more spending packages are expected to follow this year. The second extra budget for major rejuvenation projects will be under discussion after the basic plan to support victims is drawn out in this August.