Leader returns in Japan coalition

IN A remarkable comeback for one of Japan's most brilliant politicians, the ruling Liberal Democratic Party entered into a coalition with Ichiro Ozawa,who once forced it from office after 38 years in power.

After two months of negotiations, the Prime Minister, Keizo Obuchi, yesterdayannounced an alliance between the LDP and Mr Ozawa's Liberal Party. In 1993 he led a revolt against the government of Kiichi Miyazawa, who was then prime minister.

In subsequent elections the LDP lost its parliamentary majority for the first time since 1955 and was replaced by a coalition of opposition parties, which embarked upon a short-lived programme of political reforms largely designed by Mr Ozawa.

The LDP returned to government in 1996 and regained a small majority after elections the following year.

Mr Ozawa lost momentum, forming the Liberals last year after the acrimonious break-up of the much bigger New Frontier Party.

Many in the LDP have been unable to forgive the man who broke their cosy power monopoly but the party needs his support, especially in the Diet's upper house, where it still lacks a majority.

Whether Mr Ozawa can help to alleviate Japan's recession remains to be seen.

Economists agree that the only long-term solution is thorough reform of the sclerotic regulations that strangle competition and enterprise in many areas of Japanese life, from education to trade policy - and this is Mr Ozawa's pet subject.

The government's increased parliamentary presence will make it easier to avoid the parliamentary bickering that held up important financial legislation last summer. He has refused to accept a cabinet post offered by Mr Obuchi, preferring to remain where he always has - behind the scenes and in the shadows, where the real power lies.