Breakaway leader forms party to rival Japanese PM

A powerful lawmaker who broke away from Japan's ruling party launched a new political group on Wednesday in a challenge to Prime Minister Yoshihiko Noda's grip on power.

Ichiro Ozawa and 48 other lawmakers quit the Democratic Party of Japan last month in opposition to a sales tax hike pushed by Noda's government.

Ozawa, 70, was key to the party's rise to power in 2009 when it defeated the long-ruling Liberal Democratic Party.

He has been a vocal critic of Noda's plan to double the sales tax to 10 percent by 2015, saying it breaks the ruling party's campaign promise to put "people's lives first." He adopted the phrase as the name of his new party, which he said will achieve that goal.

Ozawa said a tax hike while Japan is still recovering from last year's tsunami and nuclear disaster and is coping with a prolonged economic slump only adds to the national crisis.

"We've launched the new party to return to the basics of 'people's lives first,'" he said after being selected party chief. "We will show the people policies that can help overcome their problems."

The new party also aims to reduce the country's reliance on nuclear energy — a public concern since the nuclear crisis.

Noda's party still controls a majority in the powerful lower house of Parliament, but the split will make it harder for him to achieve his policy goals.

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 earthquake and tsunami and has been sputtering for years under one of the largest public debt burdens in the developed world.

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

Polls show only 15 percent of voters have high hopes for Ozawa's new party and its reform agenda.

Ozawa remains unpopular with many people 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.

"Right now, it's a very fluid situation," said Jeff Kingston, director of Asian studies at Temple University's Tokyo campus. "The problem with Ozawa is that he doesn't look like a guy who is going to wield the broom. He looks like he represents exactly the sort of problems of old-style Japanese politics."