Japan's Ozawa vows to stay after aides arrested

The Japanese ruling party's number two, Ichiro Ozawa, said on Saturday he would not resign, media reported, after the arrest of three aides over a funding scandal that may hit government support ahead of a key mid-year election. Ozawa, widely seen as the real power in the ruling Democratic Party, told a meeting of regional assembly members he would stay in his post, media said, while Prime Minister Yukio Hatoyama said he supported the decision.
"He told me he wanted to continue to work hard in his post and I have faith in that," Hatoyama told reporters following a meeting with Ozawa. The veteran Ozawa has repeatedly denied any intentional wrongdoing, but apologised for the fuss, domestic media said. "I may have caused misunderstanding, but I have done nothing to be ashamed of," Kyodo news agency quoted him as telling the assembly members. Media said Ozawa announced he would hand over his duties temporarily to another party executive, but Hatoyama was later reported as denying any such suspension from duty.
Analysts and media say pressure on Ozawa to step down is rising, adding to the woes of Hatoyama's government ahead of an election for parliament's upper house, where his Democratic Party relies on an awkward coalition with two tiny parties to pass bills.
A poor performance in this year's election could result in stalemate between the two houses of parliament and even mean a return to the policy paralysis that has afflicted previous governments. The Democrats swept to power in the August election promising to reduce bureaucrats' grip on policy, reorient spending toward consumers, and steer a diplomatic course less dependent on security ally Washington.
Hatoyama faces his own funding scandal and opposition lawmakers have vowed to attack the two leaders over corruption in the new session of parliament, potentially delaying debate on the budget. Support for Hatoyama's government has slid to just over 50 percent, compared with levels over 70 percent when he took office in September. But many analysts say the main opposition Liberal Democratic Party, itself often racked by scandal during its half-century of almost continuous rule, may not benefit much from a fall in support for the government.