Japan PM urges minister to clear scandal suspicion

SINGAPORE, Nov 21 (Reuters) Japanese Prime Minister Yasuo Fukuda urged his finance minister today to clear up any suspicions over his ties to a defence contractor at the heart of a scandal that has worsened a parliamentary deadlock.

Finance Minister Fukushiro Nukaga has denied being wined and dined by the contractor, who was recently arrested for suspected embezzlement, but opposition parties are demanding that he testify under oath in parliament.

The scandal, which centres on a link between the contractor and a former top defence official, has further stalled Fukuda's efforts to pass legislation that would allow the resumption of a naval mission in support of US-led operations in Afghanistan.

''The finance minister needs to fully explain and make efforts to clear up any suspicions,'' Fukuda told reporters travelling with him on a visit to Singapore.

But Fukuda said there was no need for Nukaga to testify in parliament unless there was evidence of his involvement in the scandal.

Nukaga yesterday denied media reports that he had in the past acted on behalf of a construction firm and pressured defence officials to designate the company for a construction project. ''I absolutely did not do that,'' he said.

But Japanese media are speculating that Nukaga may have to resign, which would deal a blow to Fukuda, who pledged to restart the naval mission in a meeting with US President George W Bush in Washington last week.

''Many Asian leaders also told me to continue Japan's mission,'' Fukuda said, referring to his meetings during the gathering of Asian leaders being held in Singapore.

Fukuda told reporters it was too early to consider extending a session of parliament set to end on December 15 or using the ruling coalition's two-thirds majority in the lower house to pass legislation that would resume the naval refuelling mission.

The opposition has control of the upper house following a July election, giving it the power to delay legislation, but the ruling bloc can use its majority in the more powerful lower house to override any rejection.

If Nukaga were to step down, it would be third time in his career, and the first by a minister in Fukuda's cabinet.

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

Reuters SG DB1145