Japan opposition leader to stay, confusion remains

TOKYO, Nov 7 (Reuters) Japan's opposition leader has formally reversed his decision to quit, vowing today to devote himself to winning at the polls and averting a shift that could have handed the ruling bloc complete control of parliament.

''I have resolved to risk my political career and fight together with you all to win the next election,'' Democratic Party chief Ichiro Ozawa told party lawmakers days after resigning in a huff after his party rejected a proposal to enter a grand coalition with the ruling Liberal Democratic Party (LDP).

Ozawa's change of heart ended speculation, for now, that he and his allies might defect to the ruling camp, possibly robbing the opposition of its majority in the upper house, where it can delay legislation.

The latest twist in Japan's political saga has nonetheless dented the Democratic Party's image just months after it wrested control of the upper house, raising its backers' hopes that it might win the next general election for the more powerful lower house and be able to form a government.

Analysts said it remained to be seen whether Prime Minister Yasuo Fukuda could take advantage of opposition disarray to break a parliamentary deadlock that has stalled policy steps, including an extension to a naval mission in support of US-led operations in Afghanistan that was halted last week.

Ozawa -- a 65-year-old former LDP lawmaker nicknamed the ''Destroyer'' for his ability to bring change to the political scene -- announced his intention to step down on Sunday.

Democratic Party executives begged him to stay, hoping to prevent a breakup of the party, a fractious group of former LDP members, ex-socialists and hawkish younger lawmakers.

Today's remarks by Ozawa may have contained some of the fallout from his flip-flops. ''To some extent, he has achieved damage control, but not completely,'' said Yasunori Sone, a political science professor at Tokyo's Keio University.

FRESH CONFRONTATION? Chief Cabinet Secretary Nobutaka Machimura told a news conference he hoped policy cooperation with the Democrats was still possible, even if the idea of a grand coalition -- floated in one-on-one talks between Ozawa and Fukuda last week -- had been shelved.

But Ozawa said the party's shadow cabinet had reaffirmed its opposition to extending the stalled naval mission, in which Japan's navy had refuelled US and other ships patrolling the Indian Ocean, and seemed to rule out talks on other key matters.

''I had thought policy consultations were OK as one method if we could realise our assertions, but the executives rejected that, so I gave it up,'' Ozawa told a separate news conference.

The LDP and its junior coalition partner can override the upper house with their two-thirds majority in the lower chamber, but have been wary of doing so for fear of a public backlash.

Analysts questioned whether the Democrats would speak with a single voice from now on.

''There will be a lot of guys in the DPJ going on TV and saying 'Sorry for the confusion, what we meant to say was ...','' said Steven Reed, a political science professor at Chuo University in Tokyo.

''But it's not going to have credibility and they don't have a unified answer. It's all up in the air.'' The political uncertainty is clouding prospects for setting a date for the next general election, which must be held by 2009.

The opposition chaos might incline Fukuda to call a poll soon, but some analysts doubt he would be willing to risk losing the huge lower house majority won by the ruling bloc in 2005.

''The Democrats committed a huge error of judgment. It's their loss, but it's not necessarily the LDP's gain,'' said Koichi Nakano, political science professor at Tokyo's Sophia University.

REUTERS PD RAI1635