Japan PM to meet opposition, coalition talk unlikely

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TOKYO, Nov 19 (Reuters) Prime Minister Yasuo Fukuda will meet the leader of Japan's main opposition party on Thursday, an opposition lawmaker said, but he added that an aborted attempt to forge a grand coalition was unlikely to be revived.

Democratic Party leader Ichiro Ozawa will meet Fukuda to hear a report on Fukuda's talks last week with US President George W. Bush and his visit to Singapore for an Asian leaders' gathering, as well as to discuss the situation in parliament, Democratic Party executive Kenji Yamaoka told reporters.

A standoff in parliament, where opposition parties control the upper chamber house and can delay bills, has created a policy deadlock ever since an upper house election in July.

Asked if the notion of a grand coalition between Fukuda's Liberal Democratic Party (LDP) and the Democrats would be a topic, Yamaoka told reporters: ''I don't think there will be talks on a grand alliance or a major discussion of policies.'' Yamaoka said Fukuda was also expected to meet leaders of other smaller opposition parties.

Japanese politics was thrown into turmoil earlier this month when Ozawa first discussed a coalition with Fukuda, then tendered his resignation when his party executives rejected the idea, and finally decided to stay on after Democratic lawmakers, fearing he might defect to the ruling camp, begged him not to quit.

The confusing political theatre dented the Democrats' image just months after the opposition victory in July raised supporters' hopes that they might oust the ruling bloc in the next general election and form a government.

Fukuda, 71, has headaches of his own, including a Defence Ministry scandal centring on links between a former top bureaucrat and a former defence contractor recently arrested on suspicion of embezzlement.

ELECTION TIMING Finance Minister Fukushiro Nukaga reiterated today that he had not attended at a dinner with the bureaucrat and the former contractor and said that while he had received funds from people related to the firm, the money had been returned.

Ozawa, a former LDP star known as the ''Destroyer'' for his talent for stirring up politics, told Reuters last week that a grand coalition was not on the cards even if his party failed to win a majority in the next election for parliament's lower house.

LDP heavyweights, however, have been loath to drop the idea since parliament will remain divided at least until the next upper house election in 2010 unless the opposition wins control of the more powerful lower chamber and forms a government.

The standoff in parliament, which has stalled a bill to resume a Japanese naval mission in support of US-led operations in Afghanistan, has prompted speculation that Fukuda will call an early election for the lower house.

But victory by a Democratic-backed candidate in an election on Sunday for mayor of the western city of Osaka could well make Fukuda wary of an early snap poll, since winning over urban voters will be critical in the next election.

The ruling bloc has a two-thirds majority in the lower house that would allow it to enact bills rejected by the upper chamber, but has been cautious about taking the rare step for fear of a public backlash.

No election for the lower house need be held until late 2009, but many pundits expect one in April or May if not sooner.

Fukuda took over in September after his predecessor, Shinzo Abe, quit abruptly following a year plagued by scandals involving cabinet ministers that contributed to the election loss in July.

REUTERS SYU HT1607

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