Mastermind Ozawa seen in key role after Japan poll

TOKYO (Reuters) - The influence of Japan's master political strategist Ichiro Ozawa on everything from economic policies to diplomacy could increase if, as seems likely, the opposition Democratic Party he once led wins an August 30 election.

The prospect he will wield greater clout has raised concern about an opaque policy-making process, but several analysts said predictions that the politician who has fascinated pundits and the public for decades would call all the shots were overdone.

"It's not going to be a one-man Ozawa show. Of course, he is a player, but not the only player," said Sophia University's Professor Koichi Nakano. "In some ways, it's just a scare story."

Opinion polls show the opposition have their best ever shot at defeating the business-friendly Liberal Democratic Party (LDP) in the election for parliament's lower house. That would end more than 50 years of almost unbroken LDP rule and usher in a government determined to pay more heed to consumers than companies.

Since May, when he quit as Democratic Party leader after a close aide was nabbed in a funding scandal, Ozawa has been doing what many say he does best -- working behind the lines as the party's chief campaign strategist.

A hefty win by the Democrats would likely ensure the 67-year-old veteran takes a key role again as the party turns its attention to how to win an upper house election in mid-2010.

With wooing voters his top priority, Ozawa would likely push for economic policies to boost household income -- already featured prominently in the Democrats' platform -- rather than worry about reining in Japan's huge public debt.

Market players are already worried the Democrats' spending plans will further inflate a public debt equal to nearly 170 percent of GDP, pushing up government bond yields.

"If the Democrats win big, his influence will increase," said independent political commentator Minoru Morita.

"The next goal is the upper house election and Ozawa will take the lead in seeking victory, so they will stress policies to improve livelihoods rather than fiscal reform."

Ozawa's successor, party leader Yukio Hatoyama, has already faced criticism for being too much under Ozawa's thumb.

Asked this week about what role Ozawa would play if the Democrats won power, Hatoyama said only that he would have an important post. Many expect Ozawa to be given the No.2 party job of secretary-general rather than a cabinet portfolio.

UNDENIABLE INFLUENCE

Once a rising star in the LDP, Ozawa bolted the ruling party in 1993 and helped to replace it briefly with a multi-party reformist coalition led by Morihiro Hosokawa as prime minister.

Although he held no cabinet post, many agree he ran the show from the shadows, masterminding for example a sudden proposal, later dropped, to raise Japan's sales tax to fund rising social welfare costs.

In recent years Ozawa has sounded a more populist note and his promises as party leader to aid farmers with children with cash payments and keep the sales tax at its current 5 percent helped the opposition win a 2007 upper house election.

That victory gave the Democrats and smaller allies the ability to stall legislation, creating a policy stalemate that has plagued successive LDP governments ever since.

Despite Ozawa's undeniable influence, analysts say the situation differs from when Hosokawa led an unwieldy coalition bound mostly by antipathy to the LDP, since this time the Democrats would be by far the biggest party in a new ruling bloc.

His clout is also likely to be offset by other key party leaders including not only Hatoyama but former party chief Naoto Kan and Secretary-General Katsuya Okada, known to harbor concern about how to wean Japan's finances from reliance on debt.

"If candidates picked by Ozawa are elected in large numbers, his influence will increase to that extent, but that doesn't mean an 'Ozawa group' will automatically make all the decisions," said Yasunori Sone, a Keio University political science professor.

Still, Ozawa's ability to surprise has some predicting he will again make waves in an effort to achieve what they say is his cherished goal of a conservative counterweight to the LDP.

In that view, the Democrats don't fill the bill because they include left-leaning lawmakers as well as conservatives.

Ozawa sparked turmoil in 2007 by proposing a "grand coalition" with the LDP, but the plan was rejected by his party.

"Ever since he left the LDP in 1993, he has been trying to crush the LDP and now it is possible that he will finally achieve this goal," Takao Toshikawa, editor in chief of newsletter Tokyo Insideline, told a news conference on Tuesday.

"What he wants to do after that is create a new conservative party," he said.

(Editing by Dean Yates)