Japan's ruling party No 2 denies scandal, will stay on

Japanese ruling party kingpin Ichiro Ozawa denied on Saturday any wrongdoing in a funding scandal that is dimming his party's mid-year election prospects, and vowed to stay on in his key position. Prosecutors questioned Ozawa, seen as the most powerful politician in the ruling Democratic Party, for four hours on Saturday over the scandal, in which three of his aides were arrested on suspicion of misreporting political donations.
The scandal has eroded support for Prime Minister Yukio Hatoyama's government ahead of the poll for parliament's upper house, risking policy stalemate in the long term. Ozawa, who holds the key post of party secretary-general, is the Democrats' key campaign strategist and is widely seen as the real power behind Hatoyama's administration.
"I have to apologise to the public about things including my aides, but I would like to fullfil my duty," he told a news conference when asked if he will stay in his post. Ozawa also released a statement denying that either he or his funding group had received illegal donations, or that he himself was involved in any false reporting of political funds.
The Democrats need an upper house majority to reduce reliance on small coalition partners and enable them to pass bills smoothly. The party swept to power last year promising to reduce bureaucrats' control of policy, cut waste and boost consumer spending power to help the weak economy. Ozawa came under fire after prosecutors arrested the former and current aides earlier this month.
He has repeatedly denied any intentional wrongdoing and he was not legally obliged to respond to the prosecutors' request that he answer questions about the case. Hatoyama has backed Ozawa, credited with engineering his party's historic win in an election for the more powerful lower house last August that brought it to power, and said he hoped the party No 2 would have a chance to prove his innocence. On Saturday, he repeated his hope that Ozawa was innocent. "He has said he is innocent, and I want to believe that," Hatoyama told reporters ahead of Ozawa's news conference.