>Japan’s PM hangs on but outlook grim

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Japan’s unpopular Prime Minister Naoto Kan on Monday refused to step down after the resignation of his foreign minister over a political funding scandal that has added to pressure on him to quit or call a snap election.

But it is far from clear how Kan, if he does manage to cling to office, will be able to resolve the political stalemate that has left the government struggling to implement policies to cut into a huge public debt and win approval from a divided parliament to enact a new budget from April.

“Carrying out the administration’s duty for the four-year term and then letting the people decide at the ballot box is best for the people themselves,” he told a parliamentary session.

“I intend to firmly fulfill my duty until that time comes.”

But some analysts warned that Kan’s government may well collapse sooner than later. He is Japan’s fifth leader since 2006 and has no clear successor in sight.

The resignation of Seiji Maehara, a security hawk and critic of China’s military buildup, removes a strong contender to replace Kan and has deepened the impression of a government in disarray, unable to resolve deep problems facing the world’s third largest economy.

The stalemate is blocking passage of budget bills to implement a $1 trillion budget for the year from April and keeping the government from tackling tax reforms to curb massive public debt, already twice the size of the $5 trillion economy.

Kan has made fiscal reforms including a rise in the 5 percent sales tax a priority as a way to fund the social costs of a fast aging society. But he has failed to get opposition parties to join in talks on the topic.

Chief Cabinet Secretary Yukio Edano will serve temporarily as foreign minister while Kan picks a successor, who will have a full plate managing strained ties with China and Russia and keeping relations with ally Washington on an even keel.

“LACK OF GOVERNING ABILITY”

Kan’s health minister, Ritsuo Hosokawa, is also under fire for messy handling of measures to help housewives who had mistakenly failed to pay their pension premiums, and media warned more cabinet ministers could quit in a “domino effect.”

Kan faces pressure from within his own fractious Democratic Party of Japan (DPJ) to step down, while opposition parties are pushing him to call a snap election in the powerful lower house.

“This has revealed the Kan administration’s lack of governing ability, and the only ways to break through this situation are for the cabinet to resign as soon as possible or for a snap election to be called,” Kenji Kosaka, a lawmaker in the main opposition Liberal Democratic Party (LDP), told reporters.

Jiji news agency quoted an LDP executive as saying the main opposition party could submit a censure motion against the prime minister this month.

A Yomiuri newspaper poll released on Monday showed that 51 percent of voters wanted Kan to resign, with 56 percent saying they’d blame the government and DPJ if bills needed to enact a $1 trillion budget for the year from April are not passed on time.