'Mr Clean' leaves Japan in disarray: Hosakawa bows out, dashing reform hopes and threatening government

HOPES of political reform in Japan suffered serious damage yesterday when Morihiro Hosokawa, a self-proclaimed 'Mr Clean', resigned as Prime Minister after admitting irregularities in his finances. He took office last August as head of a fractious seven-party coalition which was threatening to fall apart last night in the wrangle over his successor.

Mr Hosokawa was the first Japanese prime minister in 38 years to come from outside the scandal-tainted Liberal Democratic Party (LDP). Like four of his five immediate predecessors, however, he departs in a familiar atmosphere of corrupt 'money politics', claiming questionable deals had been done without his knowledge. His sudden resignation took both his coalition partners and the opposition by surprise.

Mr Hosokawa was brought down by revelations that he had received pounds 625,000 while running for the governorship of Kumamoto prefecture in 1983. He said he had borrowed the money from the infamous Sagawa trucking company, which has been linked with organised crime and extensive political bribery, but was unable to produce receipts showing the money had been repaid, and refused to allow his aides to testify to parliament about the matter. While the Prime Minister said the 'loan' was for improvements to his home, his opponents claimed it was a straightforward political bribe that had been used to finance his campaign.

Questions were also raised about a loan of pounds 2.7m Mr Hosokawa allegedly received from the telecommunications giant NTT, to enable him to buy shares on highly favourable terms. He told parliament the deal was entered into by his late father-in-law, and that he himself knew little about it.

Yesterday, however, he announced: 'I have discovered that there were legal problems with the way a person, an old friend of mine, was investing my personal funds for a few years from 1981. I have notified the ruling coalition leaders and the cabinet of my intention to resign and this has been accepted.' The LDP has used the affair to paralyse parliament for the past month, holding up the national budget to demand more information, and Mr Hosokawa said he was stepping down to accept moral responsibility for the impasse.

The Prime Minister's fall from grace was even faster than his rise. Once an LDP MP, he returned to national politics only in 1992 at the head of the Japan New Party, pledging reform. With his aristocratic background and clean-cut looks, his assumption of office appeared to symbolise the departure from the old politics, conducted by colourless men a generation older than him, and his initial approval ratings were more than 80 per cent.

But Mr Hosokawa's popularity soon declined as coalition squabbling and economic stagnation worsened. The LDP, with its decades-old links to business and the civil service, found it easy to undermine him. It formed an alliance with the largest party in his coalition, the Socialists, to wreck his plans for political reform, while his partners forced him into an embarrassing withdrawal of his tax-reform proposals. A threatened walk- out stopped him reshuffling the cabinet last month.

His attempt to talk tough with the Americans over trade also backfired, and he had to tell his colleagues to take all possible steps to open Japan's markets. Dealing with these crises and maintaining the coalition left him little time for the economy. The markets found the government's stimulation proposals unconvincing, which may explain why shares ended higher yesterday after an initial plunge.

The growing suspicion of financial scandal was the final blow to a prime minister who had already lost much of his glamour. His support had declined to less than 50 per cent in the polls, and by the time he announced his departure, Mr Hosokawa looked as haggard as any of his predecessors.

Trade setback, page 17

Start your day with The Independent, sign up for daily news emails
News
Courtney Love has admitted using heroin while pregnant with Frances Bean Cobain, her daughter with Kurt Cobain
people
Sport
Murray celebrates reaching the final
tennis
Life and Style
life
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Construction Solicitor - City

Excellent Salary: Austen Lloyd: NON-CONTENTIOUS (0-2 PQE) - A rare opportunity...

Recruitment Genius: Senior Financial Analyst

Negotiable: Recruitment Genius: A Senior Financial Analyst is required to join...

Recruitment Genius: Business Support Administrator - Part Time

Negotiable: Recruitment Genius: This is an opportunity to join the South West'...

Recruitment Genius: Secretary

£15000 per annum: Recruitment Genius: This major European Intellectual Propert...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness