* Voter anger hits PM at local elections
* Ruling DPJ party weakened
* Grand coalition less likely (Adds details, analyst comment, quotes)
By Linda Sieg and Chisa Fujioka
TOKYO, April 11 (Reuters) - Prime Minister Naoto Kan’s ruling party suffered embarrassing losses in weekend local elections after the Japanese leader came under fire over a nuclear disaster, further weakening his clout and bolstering rivals who want him to quit once the crisis ends.
Among the victors was the outspoken nationalist incumbent governor of Tokyo, Shintaro Ishihara, who won a fourth term despite having said the deadly earthquake and tsunami that triggered the nuclear crisis was “divine punishment”.
Ishihara, known for his criticism of China as well as elite bureaucrats at home, urged Tokyo residents to conserve energy after problems at the quake-stricken nuclear plant caused power shortages and rolling blackouts in the capital.
“People need to give up some luxuries,” he said after his victory was assured, calling for shorter hours for “pachinko” pinball parlours and fewer vending machines.
The unpopular Kan was already under pressure to step down before a massive earthquake and tsunami struck on March 11, leaving his government to cope with the worst crisis to hit Japan since World War Two.
Kan is unlikely to be forced out while Japan struggles to regain control of a crippled nuclear power plant north of Tokyo, in the world’s biggest nuclear crisis since Chernobyl.
But Kan’s departure after the crisis could make it easier for his Democratic Party to form a “grand coalition” with the main opposition Liberal Democratic Party (LDP), which many voters favour as a way to deal with the tens of thousands left homeless, a reeling economy and the nuclear crisis.
Kan’s ruling Democratic Party of Japan (DPJ) lost 69 seats in a Sunday vote for prefectural assemblies as well as losing three gubernatorial elections where it had backed candidates.
“LACK OF TRUST”
But Sunday’s losses are likely to dampen moves toward the early formation of a “grand coalition” and could instead encourage opposition parties to end the uneasy political truce in place since the March 11 quake and tsunami, which left some 28,000 dead or missing, devastated northeast Japan.
“The interpretation ... in Japanese media is that the DPJ is weak and getting weaker and this is not time to play with them,” said Koichi Nakano, a professor at Sophia University in Tokyo. “That momentum (for a coalition) is going to be weakened.”
The LDP’s No.2, Nobuteru Ishihara, said that the trust needed between two parties for cooperation was lacking. “The election results show that voters are asking, can we allow the Kan government to handle the situation?” Ishihara said.
Still, it remains to be seen how obstructionist opposition parties can be as Japan tackles its biggest reconstruction project since the end of World War Two and struggles to contain the world’s worst nuclear crisis in 25 years. The DPJ controls parliament’s lower house but needs opposition help to pass bills, including funding legislation, in the upper chamber.
“The opposition may quarrel with details, try to humiliate the government and push Kan out, but broadly, there are going to be emergency measures and the opposition will have to comply,” Nakano said.
Analysts had expected the Democratic Party to lose seats, with a heavy loss likely to be blamed on Kan.
But fewer than half the 45 candidates backed by the small “Tax Cut Japan” party led by a popular mayor in central Japan won seats, a sign that voters may now see lower levies as unrealistic given the huge bill for reconstruction.
Kan, who took office last June as Japan’s fifth leader since 2006, had seen his ratings slump to around 20 percent even before the calamites due to policy changes and perceived missteps in diplomatic rows with China and Russia.
His ratings have risen to around 30 percent since but a majority of voters are unhappy with his handling of the nuclear crisis, in which releases of radioactive material into the air and sea have alarmed Japan’s neighbours.
Kan is unlikely to be forced out during the nuclear crisis, which could last months as engineers struggle to restore cooling functions of the crippled nuclear reactors at the Fukushima Daiichi plant in the country’s northeast.
Kan’s eventual resignation could conceivably clear the way for a rejigged ruling coalition, breaking a parliamentary deadlock that has kept Japan from crafting policies to address the country’s most profound problems, a fast-ageing society and huge public debt. But who would replace his is far from clear.
Reporting by Chisa Fujioka; Editing by Michael Perry