Japan's ruling party is set to elect a new leader on Monday with five candidates in the running to succeed Naoto Kan as prime minister.

Kan resigned on Friday amid criticism over his handling of the country's response to the March earthquake and tsunami which killed thousands and triggered an ongoing nuclear crisis, and with the world's third-largest economy still struggling to shake off decades of stagnation.

Trade minister Banri Kaieda has emerged as the frontrunner for Monday's poll, but with none of the candidates expected to win a majority in a first round vote, a run-off looks likely, media surveys showed on Sunday.

The 62-year-old Kaieda, who has secured the backing by Ichiro Ozawa, a 69-year-old political mastermind and influential powerbroker within the Democratic Party of Japan (DPJ), had support from about 115 of the 398 Democratic parliamentarians eligible to vote in the party's upcoming election, a survey by the Mainichi newspaper showed.

Former foreign minister Seiji Maehara, 49, who says beating deflation is a top priority, was jostling with finance minister Yoshihiko Noda, 54, and little-known farm minister Michihiko Kano, 69, for second place, the Mainichi and other Japanese newspapers said.

A fifth candidate, former transport minister Sumio Mabuchi, 51, was lagging behind.

Japan's next leader, who would be the country's sixth prime minister in five years, faces huge challenges including a resurgent yen that threatens exports, forging a new energy policy while ending the worst nuclear crisis since Chernobyl.

The country also faces huge costs to rebuild the devastated northeast coast, which suffered the worst effects of March's twin natural disasters.