Tokyo, Aug 30 (IANS): Japan's parliament has backed former finance minister Yoshihiko Noda as the country's new prime minister, BBC reported Tuesday.

The parliament's approval came after the 54-year-old Noda secured the leadership of the ruling Democratic Party of Japan in an election Monday.

Former prime minister Naoto Kan - criticised for his handling of the response to the devastating quake that hit the country in March - formally resigned with his cabinet.

Analysts said Noda faces a daunting task ahead.

Many areas of Japan need to be rebuilt after the earthquake and tsunami, and the crisis at the Fukushima nuclear power plant still needs to be resolved.

Noda will also need to address the stagnant economy.

The new prime minister said Tuesday Japan faced problems with deflation.

He said he wants Japan's halted nuclear reactors to be restarted. Noda has not backed former prime minister Kan's call for a nuclear-free Japan.

Monday's party vote went into a run-off between Noda and former trade minister Banri Kaieda.

The Democratic Party of Japan won power in the general election of 2008, ending almost half a century of unbroken rule by the Liberal Democratic Party. But later it lost control of the upper house in the 2010 elections.