Japan leadership race starts after PM quits

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TOKYO, Sep 13 (Reuters) Japan's finance minister became the first to launch a bid today to lead the country as the ruling party scrambled to avoid a policy vacuum after Prime Minister Shinzo Abe's shock resignation.

Liberal Democratic Party (LDP) lawmakers decided to hold an election for party president -- and hence premier -- on September 23, rejecting a proposal for September 19 to give candidates more time to make policy pitches to the public.

''To turn this adversity into opportunity, we should seek candidates from a wider spectrum. This is a golden opportunity to convey the messages of candidates to the party members as well as the people,'' said former party secretary-general Tsutomu Takebe, who had lobbied for an even later date.

Abe's year in office has been marked by scandals involving cabinet members and a disastrous election defeat in July.

Abe had said he was quitting over a stalemate in parliament but officials said health problems were also a factor, and he was admitted to hospital today for gastrointestinal disorder worsened by stress and exhaustion.

His doctors said he would likely be hospitalised for three or four days.

The conservative leader's decision to step down now sparked criticism and concern the ensuing confusion could stall vital decisions on policies such as tax and fiscal reform.

Finance Minister Fukushiro Nukaga, 63, quickly threw his hat in the ring, saying: ''I think it is a politician's responsibility and duty to face this difficult time with determination. I want to take the lead.'' A former defence and economics minister, Nukaga has twice had to step down over scandals but was one of several veterans tapped by Abe for a revamped cabinet just last month.

Former chief cabinet secretary Yasuo Fukuda, who many Abe critics had hoped would challenge him last year, told reporters he was considering running, but had not made a final decision.

LDP Secretary-General Taro Aso, a close Abe ally, is seen by many as frontrunner to take over, but any successor will still face a deadlock in parliament.

''It is questionable whether just replacing the prime minister will break through the political confusion,'' the Nikkei business daily said in an editorial.

''No matter who is the next prime minister, managing the administration will be extremely tough.'' UNCERTAINTY AHEAD Financial markets were stable, though concerns about political uncertainty remained.

The main opposition Democratic Party, which with small allies won control of the upper house in the July election, can delay egislation, including a bill to extend a Japanese naval mission in support of US military operations in Afghanistan. A law mandating the mission expires on November 1.

Other diplomacy could also be affected. Abe, an advocate of a bolder foreign policy who thawed chilly ties with Beijing, had been expected to visit China this year to keep up that momentum.

Aso may have the edge in the leadership race, but his closeness to the outgoing leader and a record of gaffes leave doubts as to whether his victory is assured, analysts said.

Other names floated include former finance minister Sadakazu Tanigaki and party veteran Taku Yamasaki.

Abe's maverick predecessor Junichiro Koizumi flatly rejected a request to run again, a party lawmaker said.

The new leader is likely to head the LDP going into the next general election for parliament's lower house.

No poll for the lower house need be held until 2009, but some analysts say deadlock in parliament resulting from the opposition's grip on the upper house could trigger one sooner.

While the opposition has control of the upper house, the LDP and its junior partner have a large majority in the lower house, which picks the prime minister.

''Whoever becomes the next prime minister, he should be temporary and the public's confidence should be gauged with ... a general election,'' Yukio Hatoyama, the Democrats' number two executive, told reporters.

Abe, at 52 Japan's youngest prime minister since World War Two, took office last September with approval ratings of around 60 percent, but his support dwindled due to lost pension records and a series of scandals which cost him five cabinet ministers, including one who committed suicide.

Reuters SS GC1700

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