Dozens quit Japan's ruling party in blow to PM

[July 02, 2012]  TOKYO (AP) -- A powerful member of Japan's ruling party and dozens of his followers quit the group Monday and are likely to form their own rival bloc, dealing a blow to Prime Minister Yoshihiko Noda.

Ichiro Ozawa and 49 other lawmakers submitted their resignations to the Democratic Party of Japan and others could follow later, a party official said. Thirty-eight are members of the lower house of Parliament, where a loss of 11 more lawmakers would end the ruling party's majority and could force Noda to call new elections.

Ozawa, 70, played a key role in the party's rise to power in 2009, defeating the long-ruling Liberal Democratic Party. He has been a vocal critic of Noda's plan to double Japan's sales tax to 10 percent by 2015.

The tax hike has passed the lower house and is likely to be approved by the less-powerful upper house since it has the backing of the two largest opposition parties.

Ozawa said the ruling party has "betrayed" the public by teaming up with the opposition to ram through the tax hike.

"The Democratic Party under Prime Minister Noda is no longer the one that achieved a power change," Ozawa told a news conference. "We are looking at forming a new party in order to return to our initial principle of establishing a political system in which the people can have a choice."

Ozawa declined to give further details about the new grouping, but said it would focus on addressing the people's main concerns, such as nuclear safety, in addition to opposing the tax increase.

Ozawa is unpopular with many voters and is seen as an old-style, wheeling-and-dealing "shadow shogun." However, he continues to have a loyal core of supporters, many of them younger politicians whose careers he helped launch.

The party split will make it harder for Noda to work with Parliament to achieve his policy goals.

Noda has only been in office since September. He has made the tax hike the centerpiece of his efforts to finance Japan's rapidly aging society. Opponents say a higher sales tax would hurt the economy, which was hit hard by last year's devastating earthquake and tsunami and has been sputtering for years under one of the largest public debt burdens in the developed world.

Ozawa had his party membership reinstated in April after he was acquitted in a political funding scandal.

[Associated Press; By MARI YAMAGUCHI]

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