* Ozawa’s former aide to be indicted on Thursday -Kyodo
* Ozawa questioned by prosecutors again, denies wrongdoing
* Kyodo says Ozawa aide to be charged on Thursday
* Japan PM says keeping house in order a matter of course (Adds Kyodo report aide will be charged, paragraph 3)
By Isabel Reynolds
TOKYO, Feb 1 (Reuters) - Pressure appeared to be rising on Monday for ruling party kingpin Ichiro Ozawa to quit ahead of an election, after a poll showed a majority of Japan’s voters think he should go if a former aide is charged in a funding scandal.
Ozawa’s electioneering skills have been thought vital to the Democratic Party’s chances of winning the upper house poll expected in July, but he has come under fire after three current and former aides were arrested last month on suspicion of misreporting political donations.
Prosecutors have decided to charge one of the aides, lawmaker Tomohiro Ishikawa, on Thursday, Kyodo news agency reported.
Ozawa, who was questioned by prosecutors for a second time on Sunday, hinted he could step down if he himself is charged, but denied he was involved in illegal activity.
“I have never taken any illegal contributions, bribes or improper funds so I don’t expect to be held criminally responsible,” Ozawa told a news conference.
“But if I am, then I would bear heavy responsibility.”
In a poll by the Mainichi newspaper, 76 percent of respondents said they thought he should resign if his former aide Ishikawa was indicted.
Voter support for Prime Minister Yukio Hatoyama's young government stood at 50 percent, down five points, but slightly higher than in several other recent polls. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For graphic on voter support, see r.reuters.com/myv63g ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The Democrats must avoid policy deadlock as they struggle to balance economic stimulus and a fight against deflation with rising public debt and the needs of a rapidly ageing population.
Though he won a landslide in last year’s general election for the more powerful lower house, Hatoyama needs to win a majority in the upper house to enable his government to pass laws smoothly without relying on a coalition with two small parties that differ with the Democrats on security and economic policy.
Ozawa has repeatedly said he will stay in the key post of Democratic Party secretary-general, denying any intentional wrongdoing after he was questioned by prosecutors.
But increasingly negative public opinion could make him more of a liability than an asset for the Democrats and Hatoyama, who has previously said he would stand by Ozawa.
“It is a matter of course to show we can keep our house in order, but while the prosecutors are investigating, all we can do is watch the situation calmly,” Hatoyama was quoted by Kyodo as saying when asked about similar comments by Transport Minister Seiji Maehara over the weekend.
Senior party lawmaker Yukio Edano also said at the weekend that Ozawa should draw a line under the affair if his explanations failed to convince voters, the Nikkei newspaper reported.
Hatoyama faced a grilling over Ozawa and about his own financial scandal in parliament on Monday, but the Mainichi poll showed that 60 percent of respondents thought there was no need for Hatoyama himself to step down.
“What is important is not creating an image, but doing our best for the people,” he said in response to opposition questions.
Analysts said the Democrats would probably fare better with Ozawa out of the spotlight, although he would likely continue to operate behind the scenes.
“With criticism on the rise, the public is going to find it hard to understand if he stays on for the sake of the election,” said Katsuhiko Nakamura, director of research at think tank Asian Forum Japan.
“The Ozawa affair is seen as part of the old-style politics that needed to be changed. If Ozawa resigns, that could be taken as a sign the party is sloughing that off and progressing to a new style. That could give them a fair chance at the election.” (Additional reporting by Chisa Fujioka and Edwina Gibbs; Editing by Paul Tait)