Japan's opposition leader seen staying on

TOKYO, Nov 6 (Reuters) Ichiro Ozawa, leader of Japan's main opposition party, was likely to reverse his sudden announcement to resign, party executives today said averting a possible shift in the power balance in the divided parliament.

Ozawa had offered to step down on Sunday after his Democratic Party rejected the idea of a grand coalition with the ruling bloc, leading to speculation that he may bolt the party with his supporters and join the ruling camp, giving away the opposition's control of the upper house.

The Democrats, who have been buoyed by a victory in the July upper house election led by Ozawa, were sent scrambling to persuade him to stay on, and gathered all of their lawmakers to show that they were united in backing the leader.

''I understand that Mr Ozawa will continue as leader,'' a Democratic Party lawmaker quoted Secretary General Yukio Hatoyama as telling a meeting of the party executive.

Ozawa was not present at any of the meetings and executives were expected to meet him later in the day to urge him to stay, party officials said.

Ozawa said on Sunday he was willing to join hands with the ruling coalition -- an idea that came up in his private talks with Prime Minister Yasuo Fukuda last week -- saying that it would be the best way for his party to be in power, adding that winning the next general election was extremely difficult.

But his proposal was rejected overwhelmingly by his party, many of whose members believe that they have their best chance ever of taking power through the lower house election following their upper house victory.

No lower house election need be held until 2009, but analysts have said political deadlock brought about by the divided parliament could spark a snap election sooner, most likely within next year.

Prime minister Fukuda has been pushing for cooperation from the Democrats to pass legislation through parliament, including a bill to restart a Japanese naval mission in support of US-led military operations in Afghanistan.

But a majority of voters were against a coalition between the main ruling party and the biggest opposition, a poll showed today.

According to a survey by Kyodo news agency, 56.4 per cent of respondents did not support the idea of a coalition, while 25.8 per cent gave it backing.

Ozawa tendered his resignation on Sunday, saying the rejection was equivalent of a ''vote of no confidence'' from his own party, leading to concerns in the party that he may leave and side with the ruling bloc, something he has done in the past.

The 65-year-old Ozawa is nicknamed the ''destroyer'' for his constant reshaping of the political scene, which began in 1993 when he defected from the main ruling Liberal Democratic Party (LDP) with other lawmakers, resulting in the LDP falling from power for the only time in five decades.

If Ozawa were to join the ruling camp with 17 other upper house lawmakers, that would have resulted in the opposition losing its control of the chamber they won in the July poll.

REUTERS SS RN1702