TOKYO, Nov 1 (Reuters) - Japan's government is ready to strike a deal with the opposition to pass a critical bill needed to prevent a severe funding squeeze and it is now up to the opposition to spell out its conditions, Vice Finance Minister Tsutomu Okubo said on Thursday.
Okubo told Reuters in an interview that securing passage of the bill, which is needed to finance nearly half of the nation's annual budget, is the utmost priority for the government, and it is aware that failure to do so would plunge Japan into its own version of a ``fiscal cliff''.
``If we were to choose one bill that we wanted to enact in the current session, it would be the deficit bond bill ... The situation could turn into a Japanese fiscal cliff,'' Okubo said.
The term fiscal cliff generally refers to the massive tax hikes and cuts to public spending that could hit the United States at the start of 2013 if the Congress fails to act.
In Japan, without passage of the bill the government could run out of money by the end of this month and would have to stop debt auctions in December.
``I want the ruling and opposition parties to sit at a negotiating table and come up with concrete proposals. We should then quickly respond after looking at those proposals,'' Okubo said.
Prime Minister Yoshihiko Noda has called an extra parliament session to run until Nov. 30 in order to pass the bill, but he needs cooperation from the opposition, which controls the upper house and can block legislation there.
Opposition parties have been using that leverage to force Noda to make good on his promise in August to call an election ``soon'' for the more powerful lower house.
Some opposition lawmakers have suggested a deal is possible if the government meets other demands, such as cutting some spending in the current budget.
Okubo said the fiscal problems of Japan and the United States along with Europe's sovereign debt crisis and the slowdown in emerging market economies all pose major risks to the global economy.
(Editing by Michael Watson)