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Industry minister Takeo Hiranuma called Tuesday for a “fairly large” extra budget to safeguard small businesses against funding problems that are expected to worsen as banks accelerate their cleanup of bad loans.

“A fairly large fiscal resource will need to be secured,” Hiranuma said. “Otherwise, highly motivated small and midsize firms will be adversely affected.”

But Hiranuma did not specify the size of such a budget.

The call came amid growing political pressure on Prime Minister Junichiro Koizumi to compile a supplementary budget in defiance of his pledge to limit the issuance of government bonds to control the nation’s colossal debts.

“Deflationary pressure will mount with the acceleration of bad-loan disposals,” Hiranuma said. “But we have to ensure there are safety nets, particularly for small and midsize companies.”

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