Japan PM swiftly replaces scandal-tainted minister

TOKYO, Dec 28 (Reuters) Japanese Prime Minister Shinzo Abe moved quickly today to replace a cabinet minister who quit over a political funding scandal, the second departure of a hand-picked official in a week.

The latest scandal looked likely to dog the prime minister into the new year, reviving criticism of his selection of what many saw as a ''crony cabinet'' of personal allies on taking office in September.

The ruling Liberal Democratic Party (LDP) picked Abe to succeed the charismatic Junichiro Koizumi, seeing him as the best bet to lead them to victory in upper house elections next July.

Abe has now named Yoshimi Watanabe, an LDP lawmaker now serving as a senior vice minister, to take over as minister for administrative reform after incumbent Genichiro Sata resigned.

''The virtues of the 'Abe team' are not being mobilised skilfully, but if it gets back on track, the strategic team can function well,'' Watanabe told reporters.

Watanabe, 54-year-old son of a former foreign minister, is known for his expertise in financial matters.

Chief Cabinet Secretary Yasuhisa Shiozaki later confirmed Watanabe's appointment as minister, whose job it will be to make the government slimmer and more efficient.

Sata, a strong Abe ally in his campaign to succeed Koizumi, quit on Wednesday after finding a group of his political supporters had filed ''inappropriate'' financial statements.

It was the latest blow to Abe, whose approval ratings have fallen since he took office due to concerns that he was reviving old-style LDP pork barrel politics, where lawmakers wooed special interest groups with public works and other tax-funded measures.

Last week, Abe's point man on tax reform, Masaaki Homma, resigned as head of a government tax panel after reports he was living with a mistress in an upscale apartment subsidised with taxpayers' money.

WEAK OPPOSITION Abe's popularity was dented in November when he decided to readmit a band of 11 ''rebel'' LDP lawmakers expelled by Koizumi in 2005 for opposing his pet project to privatise the postal system.

Koizumi called a general election that year on the issue, winning a huge victory that was seen as a mandate to pursue his market-oriented economic reforms.

''The resignation of Sata, as well as Homma, showed the weakness in Abe's way of appointing only those who agree with him and support his policy, regardless of their ability and nature,'' said Takahide Kiuchi, senior economist at Nomura Securities Co.

''All Abe can do to recover from this setback is to carry out policy measures that can win public trust in his government.'' Opposition parties have vowed to keep up the pressure on Abe over Sata's resignation when parliament reconvenes in January.

But the main opposition Democratic Party of Japan has its own headaches. The party is split over key policies and its leader, Ichiro Ozawa, has been out of the picture since entering hospital for checks in September.

''The only reason why Abe was chosen as prime minister was because he was hand-picked by Koizumi as his successor and because he was popular with the public,'' said Rei Shiratori, president of the Institute of Political Studies in Japan.

''Without the public's support, however, he has a weak base within the party,'' Shiratori said. ''But the opposition Democrats are not strong either. Ozawa is ill. Abe may not be popular with the public, but he is contending with someone who is in poor health.

Reuters BDP GC0945