Japan ex-defence official arrested over scandal

TOKYO, Nov 28 (Reuters) Japanese prosecutors arrested a former top defence official who is at the heart of a scandal that is exacerbating a parliamentary deadlock and threatens to ensnare the finance minister.

The scandal over suspicions that former Vice Defence Minister Takemasa Moriya took bribes from a former defence contractor has stalled government efforts to enact a bill to restart a naval mission in support of US-led operations in Afghanistan, debate on which began in parliament's upper house today.

An upper house panel has voted to call Finance Minister Fukushiro Nukaga to testify under oath in parliament next Monday over his suspected ties to the defence contractor, recently arrested on suspicion of embezzlement.

In another sign of the political confrontation that is paralysing policy, the opposition-controlled upper house approved a bill that would bring home about 200 air force personnel based in Kuwait who are transporting cargo and personnel to Baghdad.

The legislation is sure to be voted down in the lower house, where the ruling bloc has a huge majority.

Asked about Moriya's arrest, Chief Cabinet Secretary Nobutaka Machimura told reporters: ''The arrest of someone who was a former top official, who had a heavy responsibility, would erode public confidence in the government's defence policy, so it is extremely regrettable.'' Moriya, 63, has admitted being treated to hundreds of rounds of golf and receiving other gifts from Motonobu Miyazaki, a former executive at trading house Yamada Corp, but has denied under oath in parliament having done favours for the firm.

Opposition parties, which can delay enactment of new laws because they control the upper house, are against resuming Japan's mission to refuel US and other ships patrolling the Indian Ocean and say the defence scandal must be cleared up.

Lawmakers have said the affair could affect debate on the state budget for the fiscal year starting next April 1, which needs to be enacted by March 31.

The stalemate in parliament has sparked speculation that Prime Minister Yasuo Fukuda will call an early snap election for parliament's more powerful lower house to seek a public mandate.

Moriya told parliament earlier this month that Nukaga, a two-time former defence minister who has twice resigned in the past over scandals, had been at a dinner attended by himself and Miyazaki.

Nukaga reiterated today that he had not been present at the dinner meeting and had done no favours for the defence contractor.

Fukuda, 71, took office in September after predecessor Shinzo Abe resigned, ending a year plagued by scandals and gaffes that cost him five ministers, including one who committed suicide.

REUTERS PD HT1527