Japan's Fukuda picks allies amid calls for election

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TOKYO, Sep 24 (Reuters) Japan's prime minister-to-be Yasuo Fukuda today selected his party lieutenants as he headed for battles with a combative opposition and calls for an early general election after his predecessor's hapless year in office.

The 71-year-old Fukuda, a moderate who favours warmer ties with Asia, was voted leader of the Liberal Democratic Party (LDP) yesterday after the abrupt resignation of Shinzo Abe, whose administration was crippled by scandals and gaffes.

Fukuda will automatically become prime minister tomorrow thanks to the LDP's huge majority in parliament's lower house.

However, the opposition Democratic Party and its allies hold sway in the upper house, an unusual situation that is likely to beset Fukuda's administration with policy struggles.

The thorniest issue may be Japan's naval support for US-led military operations in Afghanistan, which the LDP wants to continue beyond a November 1 mandate expiry in the face of opposition from the muscle-flexing Democratic Party.

Fukuda, who beat the hawkish Taro Aso to the top job, picked conservative former education minister Ibuki Bunmei, a faction leader and loyal ally in the leadership election, for the number two position in his party.

''This is a sign that he doesn't want to cut all Aso's policies out,'' said political analyst Minoru Morita.

''Choosing someone between himself and Aso on the political spectrum shows that he wants to follow a slightly more hawkish path than we saw during the leadership election campaign.'' Allies Sadakazu Tanigaki, a doveish former finance minister, but also a faction leader, and Toshihiro Nikai were named for the other top party posts, the party said.

Tanigaki has been an advocate of raising the consumption tax in a step towards paying down Japan's huge public debt.

Morita said his appointment meant budgetary reform would be at the centre of the new government's policy.

One difficulty facing Fukuda is how to deal with Aso himself, a former foreign minister seen by some analysts as having earned recognition for doing better than expected in Sunday's election.

He could be appointed to the cabinet this week, although many commentators say major personnel changes are unlikely because the government wants to push ahead with legislation as quickly as possible after a two-week hiatus.

CRONIES UNWELCOME Media warned that the party would be unable to restore public trust if Fukuda was seen to be appointing cronies or factional candidates to key cabinet and party positions.

The Democratic Party yesterday repeated its call for an early general election and many newspapers echoed it.

Neither Fukuda nor his predecessor, Abe, have won a mandate in a general election, leaving many voters frustrated that they have not had a chance to express their opinions.

''We want to see constructive policy debate with the opposition.

Then the new prime minister must go to the people. This is a six-month stay of execution,'' said the regional Tokyo Shimbun.

Apart from the naval mission, Fukuda must also restore the ageing population's trust in the pension system, left in tatters after millions of unidentified premium payments were discovered.

Opinion polls have shown the electorate is also deeply concerned about the increasing gap between rich and and poor.

Abe, who was admitted to hospital with a gastro-intestinal disorder exacerbated by stress after his resignation on September 12, was set to give a news conference from hospital later on Monday.

REUTERS SZ AS1024

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