Prime Minister Yoshiro Mori has decided to step down in late March or early April, soon after the Diet passes the fiscal 2001 budget, a senior member of Mori's faction in the Liberal Democratic Party said Wednesday.

LDP executives hope Mori will announce his resignation before the ruling party's convention on Tuesday and are coordinating efforts toward that goal, other LDP officials said.

In public, however, Mori continues to deny that he plans to resign.

"I have no such plans at the moment," Mori told the House of Councilors Budget Committee, referring to a report in the Asahi Shimbun that said he has told top aides he will resign after the budget and related bills clear the Diet.

"With various pending issues on the table, I believe I must complete the Diet session with leadership," he said.

LDP executives want Mori to announce his resignation on Monday, either at a meeting of the government, the LDP and its coalition partners -- New Komeito and the New Conservative Party -- or at a gathering of LDP secretaries general from local chapters.

Chief Cabinet Secretary Yasuo Fukuda, while criticizing the Asahi report, hinted Wednesday morning that Mori may make an announcement on his resignation before the LDP convention.

Fukuda, however, added, "Those issues will be discussed while debating (how to run) the party convention. Nothing has been decided yet."

Top officials of the LDP and an aide to Mori said in the morning that he is expected to make a final decision on his resignation and announce it in the near future.

"I will not deny that Prime Minister Mori will make a final decision" on his resignation soon, the aide said.

One official of Mori's LDP faction said, "It would be impossible for the prime minister to maintain his administration after the passage of the budget."

Although he survived a no-confidence motion on Monday, Mori is under intensifying pressure to step down from politicians within the ruling bloc who are worried they will take a beating in the Upper House election in July.

Mori's approval ratings, around 40 percent when he took office in April last year, have plummeted to single-digit levels in recent surveys.

The leader of coalition ally New Komeito, Takenori Kanzaki, repeated Wednesday that he hopes Mori will announce his resignation prior to the LDP convention, but did not say how it should be done.

"I hope to attend the LDP convention (as a guest) with a good feeling, and I am closely following movements in the LDP aimed at making that possible," Kanzaki said.

"At this stage, it is an issue to be dealt with by the LDP," he said.

The LDP plans to hold a party presidential race as soon as Mori resigns. The LDP's leadership plans to select a new leader in a vote that will include LDP lawmakers from both chambers of the Diet and representatives from local chapters.

The winner of the race will become prime minister because the ruling bloc holds a majority in the House of Representatives, which has the final say in selecting the prime minister.

Among possible candidates for the post are former LDP Secretary General Hiromu Nonaka, former Health and Welfare Minister Junichiro Koizumi and former Prime Minister Ryutaro Hashimoto, who is minister in charge of administrative reform.

Mori, who has been repeatedly criticized for verbal and other blunders, sparked fresh outrage last month for continuing to play golf after learning that a Japanese fisheries training ship had been sunk in a collision with a U.S. Navy submarine off Hawaii.

He was dealt another serious blow last week when former LDP heavyweight Masakuni Murakami was arrested in connection with a political bribery scandal involving KSD, a mutual aid foundation for small businesses.

Tokyo stock prices have dropped to their lowest level in 15 years recently due to worries about the nation's economy.

The key Nikkei Stock Average, which lost nearly 1,000 points last week, rose 36.15 points to close at 12,723.89 on Wednesday.