Japan PM faces likely censure but seen keeping job

(Adds quotes by Democratic Party executive Naoto Kan)

By Linda Sieg

TOKYO, June 5 (Reuters) - Unpopular Japanese Prime Minister Yasuo Fukuda could well suffer an embarrassing if non-binding censure in parliament's upper house next week, but for now the betting is he can keep his job at least for the rest of the year.

Japan's main opposition Democratic Party is likely to submit the rare censure motion against Fukuda in the opposition-controlled upper house, where it would almost certainly pass, party sources said on Thursday.

"At least in the view of party executives, this is definite," Kyodo news agency quoted a top party official as saying. "After that, it's a question of timing."

Fukuda's ratings have slipped below 20 percent in some polls as he has struggled to cope with a divided parliament, where the opposition has taken every opportunity to delay key legislation.

That has prompted talk that the ruling party may replace its leader after he hosts a Group of Eight summit in July.

But Fukuda has brushed off talk of a censure motion, telling reporters on Wednesday in Rome, where he attended a world food summit, that it might be a frivolous step by the opposition.

Democratic Party leader Ichiro Ozawa has made clear he wants to force Fukuda to step down or call a snap lower house poll by fanning public dissatisfaction with the leader and frustration over the political stalemate that is stymying government policy.

Democratic Party officials said a censure motion would take aim at Fukuda's introduction of a confusing national health insurance scheme that has outraged many elderly -- long supporters of the ruling party -- by forcing some aged 75 and over to pay more. The Democrats want to abolish the new system.

"Once this system took effect in April, the overwhelming view of the people has been that it is just too cruel," Democratic Party executive Naoto Kan told a news conference.

The insurance row came close on the heels of the ruling bloc's revival of a hefty and unpopular petrol tax used to fund roading projects that critics decried as wasteful.

NO WRITE OFF?

But political analysts said the fall in Fukuda's ratings may have bottomed out, helped by his performance on the diplomatic front after hosting a conference of African leaders and travelling to Europe this week to meet his G8 counterparts.

"We will see the end of the Diet session, and Democrats beating up on him will be off the front page," said Gerry Curtis, a political science professor at Columbia University.

"We'll have the run-up to the summit and lots of foreign policy, where he's strong, and reassuring to the public," he added. "My guess is that you can't write off Fukuda."

Kyodo quoted a top Democratic Party official as saying party executives had signed off on the decision to submit the censure motion, but that the timing and wording had yet to be decided.

An upper house resolution would have no legal clout, but it now appears more like an opposition manoeuvre to remind the public of what critics consider Fukuda's faults.

"The political meaning of a censure motion is not only a matter for each party's interpretation, but ultimately is a question of how the public views it," the Democrats' Kan said, noting Fukuda has never received a mandate from voters since no nationwide election has been held since he took office last year.

"We want to stress that the time has come for a snap election by taking advantage of the censure motion," he said.

No general election need be held until September 2009 and the ruling bloc is wary of an early poll given the risk of losing its two-thirds majority that now enables it to override upper house vetoes in most matters.

"Probably there will be no election this year, and it is hard to change prime ministers," said Keio University professor Yasunori Sone. "Of course, if his popularity sinks again, that's a different story." (Additional reporting by Isabel Reynolds)