Japanese lose faith in their reformist PM: Hosokawa was picked as Mister Clean but now faces charges of bribery - Pledges given to open market to foreign business

WHEN Morihiro Hosokawa was appointed Prime Minister last August, he carried with him the hopes of many Japanese for a more accountable, civic-minded and less corrupt political leadership, after the 38 years of uninterrupted Liberal Democratic Party (LDP) power.

The seven-party coalition he led pledged to reform the country's system of money politics, rein in the power of anonymous bureaucrats, raise the standard of living for ordinary people, and craft a more assertive Japan on the world stage.

Today many of those hopes have been disappointed and Mr Hosokawa is facing the same criticism as the LDP leaders of the past, which he displaced. He is seen as indecisive, internationally maladroit, handicapped by faction fighting within his government, manipulated by bureaucrats and open to charges of corruption and bribe-taking.

Allegations that he received pounds 625,000 from the infamous Sagawa trucking company have paralysed debate on next year's budget in the Diet (parliament) for the past three weeks. Some opposition politicians are even predicting that the Sagawa scandal will topple the Prime Minister. Yesterday Mr Hosokawa faced new accusations of lying to parliament over the purchase of shares in NTT, Japan's giant telecommunications company. The Prime Minister had said that the 1986 transaction was conducted on behalf of his late father-in-law.

But a Communist Diet member, Zenmei Matsumoto, said Mr Hosokawa, formerly the governor of Kumamoto prefecture, was not telling the truth. 'The share deal was done through an aide of Governor Hosokawa and arranged at the governor's office,' said Mr Matsumoto. 'I have the testimony of the investment consultant who arranged it.'

There are some signs that Japan is becoming a more open, outward-looking society but Mr Hosokawa is taking little credit for the process of change. It has been a long, but steep fall. Until Christmas, Mr Hosokawa's popularity rating in the opinion polls was steadily above 70 per cent.

It seemed the 56-year-old descendant of an ancient feudal lord could do no wrong. But in the latest opinion polls his rating has dropped as low as 45 per cent - the first time his popularity has been less than 50 per cent during eight months in power.

Mr Hosokawa has been forced repeatedly to back down or compromise on issues he had promised to push through parliament.

On the central issue of his administration, political reform, an alliance of the LDP and the Socialists forced him to dilute beyond recognition legislation reforming electoral and campaign financing. Opposition within his coalition forced him to retreat froma plan for tax reform. This month he retracted a plan to reshuffle his cabinet after some coalition members threatened to walk out.

On the international front, Mr Hosokawa aimed to project a more confident, assertive Japan. After travelling to Washington to meet President Bill Clinton last month, his aides boasted that Mr Hosokawa had finally learnt to say no to US trade demands. But within days Mr Hosokawa had retreated from his hardline stance, ordering his cabinet to take all possible measures to reduce trade friction with the US.

During his initial honeymoon period with the press, much was made of Mr Hosokawa's deliberately outgoing, upbeat media image.

Unlike the faceless blue- suited LDP septuagenarians, who sat back and droned formulaic responses to reporters' questions, Mr Hosokawa took his questions standing, and responded with vigour - a style his media advisers took from US politics.

But as the problems of his government mounted and grew more complex, it became obvious that the Prime Minister had only the most superficial understanding of many of the issues. More and more he was seen to be relying on Ichiro Ozawa, the controversial powerbroker in the Japan Renewal Party, for political strategy and decision-making.

To cap his problems in the Diet, there is a resurgence of interest in an alleged bribe he accepted from the Sagawa company, which has already been linked with organised crime and extensive political bribery.

Mr Hosokawa has admitted receiving pounds 625,000 from Sagawa, but maintains it was a loan which he has since fully repaid.

His critics point out the loan was made just before Mr Hosokawa was running for the governorship of Kumamoto prefecture in 1983, that Sagawa's business prospered in the prefecture after Mr Hosokawa was elected, and that the Prime Minister has yet to provide receipts to prove the entire loan was repaid. Mr Hosokawa says he has lost some of the receipts.

Nor is it clear why Mr Hosokawa would have gone to a trucking company instead of a bank for a loan, which he says he used to pay to renovate his house.

(Photograph omitted)