Japan PM brushes off ratings fall, party rebel quits

TOKYO Mon Jan 12, 2009 6:03am EST

Japan's Prime Minister Taro Aso speaks at a joint news conference with South Korea's President Lee Myung-bak (not pictured) at the presidential Blue House in Seoul January 12, 2009. REUTERS/Jung Yeon-Je/Pool

Japan's Prime Minister Taro Aso speaks at a joint news conference with South Korea's President Lee Myung-bak (not pictured) at the presidential Blue House in Seoul January 12, 2009.

Credit: Reuters/Jung Yeon-Je/Pool

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TOKYO (Reuters) - Japanese Prime Minister Taro Aso on Monday said he would not quit despite a spate of public opinion polls that show his support levels below 20 percent and again ruled out calling a snap election.

But in a sign of Aso's fraying control, a former financial services minister said he would leave the long-ruling Liberal Democratic Party (LDP) after weeks of criticizing Aso's policies.

The world's second-biggest economy is in trouble as the global financial crisis deepens. Japan's economy slid into recession in the July-September quarter and analysts say GDP in the October-December period would likely have contracted the sharpest in 34 years.

"I won't abandon the leadership," Aso told Fuji Television, appearing on a popular news program soon after returning from a visit to South Korea where he sought to boost economic ties.

Aso was chosen by the LDP last September to win over voters ahead of an election for parliament's powerful lower house that must be held by September.

His two predecessors quit after about a year in office after their popularity ratings collapsed, while other past premiers with high disapproval ratings have resigned.

Analysts now say the ruling coalition could well lose the election, as the gaffe-prone prime minister struggles to show leadership on reviving the economy as it comes under the threat of rising bankruptcies and job layoffs.

While Aso has announced a record budget for the fiscal year starting in April and two other extra budgets for the current year, he faces trouble in parliament, where opposition parties control the upper house and can delay bills.

The stalemate has sparked speculation Aso may agree to a snap poll in return for an opposition pledge not to delay the budget.

Aso dismissed the idea, saying economic policies came first.

"If I dissolved the lower house immediately, would that be an effective economic policy?" he said. "Politics would halt for two months."

REBEL MP

Aso also brushed off fresh signs his grip over the ruling party was wavering as its lawmakers grow anxious about the party's chances of winning the next election.

Yoshimi Watanabe, a former financial services minister, told reporters he would give a letter to the LDP on Tuesday saying he would leave the party.

"I believe there are more than a few people who share my views. I will leave first and campaign to the public," he told reporters.

Speculation has long simmered that some LDP lawmakers could bolt the party and join the opposition in blocking budget-related bills in parliament over the coming months.

Analysts, however, doubt Watanabe will draw support from many fellow lawmakers. Aso said he did not think others would follow.

"It's a matter for the individual, whether that person wants to leave the party or not," Aso said of Watanabe's decision to quit.

Aso defended a plan to hand out a total of 2 trillion yen ($22 billion) to individuals as a way of lifting growth. Watanabe and opposition parties say the measure would have little impact on boosting spending.

But the premier, the son of a wealthy industrial family who has said rich people should not take the money, stopped short of saying whether he would accept the payout himself, the focus of much attention in the Japanese media.

(Additional reporting by Linda Sieg, Editing by Dean Yates)

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