Leading article: Behind a modern face, there is too little change in an ossified nation

Mr Koizumi's personal energy and relaxed manner made him a distinctive political character. He was prepared to take risks

The governing party in a major developed country is facing a hard-fought and potentially transforming leadership contest - and it is not the Labour Party in Britain. Yesterday's confirmation by Japan's chief cabinet secretary, Shinzo Abe, that he will be a candidate for the leadership of the ruling Liberal Democratic Party fires the starting pistol for the race to be Japan's next Prime Minister. Junichiro Koizumi steps down later this month, after more than five years in power.

Although two other candidates have already announced their intentions, it was Mr Abe's announcement that was most keenly awaited. A scion of one of Japan's best-known political families, he was already the favourite for the job even as he kept his party guessing. Mr Koizumi came close to endorsing Mr Abe yesterday, hailing him as "the most kindred spirit" of the contenders.

The similarities between Mr Abe and Mr Koizumi are striking, as are the differences. Mr Abe, like Mr Koizumi when he became party leader, is young by the standards of Japanese politics. This could be a handicap for him in a party, and a country, where age is valued and respected. Mr Koizumi's personal energy, relaxed manner, even eccentricity, made him a distinctive political character. He was also prepared to take risks - such as the election he fought, and won, on the single issue of privatising the post office.

Mr Abe's more conventional approach may mean that he has less freedom of manoeuvre. As chief secretary in Mr Koizumi's cabinet, however, he shares responsibility for the consistent, free market economic policies the government has pursued. While criticised for its fiscal caution, by the US among others, this policy combination has served Japan well, allowing it to emerge from the recession that followed the South-east Asian currency crisis.

Growth may still be slow, but it was judged steady enough for the Japanese central bank to abandon its 0 per cent interest rate policy in July. This supplied a neat coda to Mr Koizumi's tenure as Prime Minister and should afford his successor a more auspicious initiation than he himself enjoyed.

It is on foreign policy that Mr Koizumi's legacy is more contentious. He won his first general election as party leader at least in part on a promise to pursue a more assertive foreign policy, especially towards China and North Korea. The ceremonial visits he paid to the Yasukuni shrine - which commemorates Japan's war dead, including convicted war criminals - not only infuriated China but also raised questions about Japanese attitudes towards the war.

At the same time, however, Mr Koizumi brought Japan more into the international mainstream by offering troops for peace-keeping, including a small contingent - now withdrawn - for Iraq. Mr Abe proposes more of the same, including a revision of the pacifist constitution to re-designate the country's self-defence forces as a regular army. If this were to presage a greater co-operative role for Tokyo in the global arena, this is to be welcomed. But the difficulty for Japan of assuming a role commensurate with its economic power, without giving the appearance of unhealthy nationalism, should not be underestimated.

Whoever inherits Mr Koizumi's mantle, the LPD contest will constitute only the first, and probably lesser, challenge. The new party leader faces a general election next July. The voters will then have to decide whether to play safe with the LPD or risk a change. Mr Koizumi presented a more modern face of Japan to the world but made little impact on the ossified political structures at home. That is the task that his successor, whoever it is, must address.