Dozens quit Japan's ruling party in blow to PM

A powerful politician and dozens of his followers quit Japan's ruling party on Monday and are likely to form their own rival bloc, dealing a blow to Prime Minister Yoshihiko Noda.

Ichiro Ozawa and 49 other lawmakers submitted their resignations to the Democratic Party of Japan, and others could follow later, party officials said. Thirty-eight are members of the lower house of Parliament, where a loss of 11 more seats would end the ruling party's majority and could force Noda to call new elections.

Ozawa, 70, played a key role in the party's rise to power in 2009, defeating the long-ruling Liberal Democratic Party. He has been a vocal critic of Noda's plan to double Japan's sales tax to 10 percent by 2015.

The tax hike has passed the lower house and is expected to be approved by the less-powerful upper house since it has the backing of the two largest opposition parties.

Ozawa said the ruling party has "betrayed" the public by teaming up with the opposition to ram through the tax hike.

"The Democratic Party under Prime Minister Noda is no longer the one that achieved a power change," Ozawa told a news conference. "We are looking at forming a new party in order to return to our initial principle of establishing a political system in which the people can have a choice."

Ozawa declined to give further details about the new grouping, but said it would focus on addressing the people's main concerns, such as nuclear safety, in addition to opposing the tax increase. He said a decision on policies and other details of a new party would be announced in a few days.

The party split will make it harder for Noda to achieve his policy goals in Parliament.

Noda, who has been in office only since September, has made the tax hike the centerpiece of his efforts to finance government programs as Japan's population rapidly ages. Opponents say a higher sales tax would hurt the economy, which was hit hard by last year's devastating earthquake and tsunami and has been sputtering for years under one of the largest public debt burdens in the developed world.

"It's a reform to protect the livelihood of the people and future generations," Noda said of the tax increase. "We must pass the bill, and my responsibility is to make that happen."

Ozawa is unpopular with many voters and is seen as an old-style, wheeling-and-dealing "shadow shogun." However, he continues to have a loyal core of supporters, many of them younger politicians whose careers he helped launch.

Also known as "the destroyer," he has repeatedly split and created new political groups since he bolted from the Liberal Democrats with 43 fellow members in 1993. He merged his faction with the Democratic Party in 2003.

But this time, only about half of the members of his faction are leaving the ruling party, which analysts said could indicate Ozawa's waning influence.

"Ozawa's group is rather thin and weak," said Yoshimi Watanabe, head of a small opposition group. He said Ozawa's departure could free up the ruling party to pursue policies that he had opposed, and perhaps allow it to cooperate more with opposition parties.