Japan PM contender Maehara looks to powerbroker Ozawa

Japan's former foreign minister Seiji Maehara is seen between television cameras as he attends a meeting with his party's lawmakers in Tokyo August 23, 2011.

TOKYO (Reuters) - Former foreign minister Seiji Maehara, a leading candidate to be Japan's latest premier, on Wednesday called on powerbroker Ichiro Ozawa, the latest sign that the scandal-tainted party heavyweight could hold the key to the leadership race.

Japan is set to select its sixth prime minister in five years in a party leadership race on Monday as it struggles to rebuild after a devastating tsunami, end a nuclear crisis at a crippled power plant, cope with a rising yen and curb massive public debt while the bulging costs of an aging society.

Credit rating agency Moody's on Wednesday in part blamed the political paralysis that has kept Tokyo from crafting effective policies for the cut in its rating on Japan's government debt.

When and whether to raise taxes to help curb public debt will be a focus of debate in the race to pick the next head of the ruling Democratic Party of Japan (DPJ), who will become prime minister because of the party's lower house majority.

But the visit to Ozawa's office by Maehara, a security hawk who is the most popular among candidates with ordinary voters, suggested that relations with Ozawa could matter more than policies in the party poll, in which only lawmakers can vote.

Other contenders have already made pilgrimages to Ozawa.

But Maehara, 49, must tread a fine line between avoiding looking like an Ozawa puppet to keep voter support and preventing a decisive clash with the political mastermind, who runs the biggest party faction despite the suspension of his DPJ membership after indictment over a political funding scandal.

"Maehara has very high public support and that is very powerful," said one freshman DPJ lawmaker, who declined to be identified. "The problem for Maehara is how to cooperate with Ozawa without losing public support."

INTERNAL BICKERING

Ozawa, who stepped down as DPJ leader over the donations scandal just months before the party swept to power for the first time in 2009, has been the focus of feuding almost ever since his small Liberal Party merged with the Democrats in 2003.

The bickering intensified when outgoing Prime Minister Naoto Kan sought to sideline the veteran strategist after taking office in June 2010. Kan survived a no-confidence vote in June only by persuading Ozawa supporters not to back the opposition-sponsored motion in return for a pledge to step down later.

Ozawa allies worry that Maehara, who has strongly criticized him in the past, might imitate Kan's example of trying to shut out the 69-year-old powerbroker. They also want the DPJ to keep its campaign pledges to put more cash in consumers' hands, promises current party executives are willing to revise to win opposition cooperation in a divided parliament.

"What people are worried about now is that there will be the same pattern as the Kan government, which centered on a small group of people rather than the entire party," said Tenzo Okumura, a DPJ lawmaker close to Ozawa who wants low-profile farm minister Michihiko Kano, 69, to win the leadership race.

While Maehara has a tough balancing act, Ozawa also has a difficult calculation of his own to make. Some think backing Maehara -- who has roundly criticized Ozawa in the past -- would be a bridge too far.

"Ozawa wants to protect his own power so he wants someone who is willing to be his vassal," DPJ elder Kozo Watanabe told Reuters recently. "Maehara is a politician with his own philosophy and he is not someone who would easily compromise."

But Ozawa's clout has weakened since he was indicted and backing a losing candidate would add to the impression that he's yesterday's man.

"Ozawa is not eager to be shut out in the cold, so this (cooperating with Maehara) could be a lifeline," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus. "He has a long record of not letting principles stand in the way."

(Additional reporting by Shinichi Saoshiro, Editing by Jonathan Thatcher)