Japan's opposition leader seen staying on-lawmaker

TOKYO, Nov 6 (Reuters) Executives of Japan's main opposition Democratic Party expect leader Ichiro Ozawa, who offered to resign on Sunday, to reverse his decision and stay on, a lawmaker said today.

Ozawa offered to step down after his party rejected the idea of a grand coalition with the ruling bloc, a plan that was floated in private talks with Prime Minister Yasuo Fukuda.

The discussion, which the Yomiuri newspaper said had got as far as allocating cabinet portfolios, has thrown Ozawa's party into crisis.

If he defects from the party with a group of supporters, it could alter the political balance in parliament, where the opposition controls the upper house and can stall legislation.

''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.

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 U.S.-led military operations in Afghanistan.

Party executives had urged him to stay on because he is seen as a force for unity in a party with disparate views on many issues.

REUTERS ARB ND0958