By Linda Sieg
TOKYO (Reuters) - Japan's political deadlock deepened onSunday as ruling and opposition blocs, whose bickering hasalready left the central bank governor's job empty, clashedover a contentious gasoline tax that expires on March 31.
The stalemate has raised new doubts about Prime MinisterYasuo Fukuda's future, given his difficulties in coping with adivided parliament, even as concerns about Japan's economygrow. It has also stirred speculation about a snap electionthat the opposition has made no secret of hoping to see thisyear.
Deputy Bank of Japan Governor Masaaki Shirakawa becameacting governor last week after the opposition-controlled upperhouse of parliament rejected two government nominees for thetop post.
Ruling Liberal Democratic Party (LDP) Secretary GeneralBunmei Ibuki on Sunday urged his main opposition counterpart tohold talks to resolve the BOJ stalemate, which has sparkedcriticism of both sides at a time when world central banks areworking to combat a credit crisis and calm gyrating markets.
Yukio Hatoyama, secretary general of the Democratic Party,appeared to leave the door open for consultations, but stoppedshort of agreeing to one-on-one talks.
"I think it is necessary to improve communication in someform," Hatoyama said in a debate with Ibuki on Fuji TV.
"We will cooperate for that."
Hatoyama took a stern stance, however, in the feud over athree-decade-old "temporary" gasoline tax devoted mainly toroad construction, rejecting a ruling camp call for talks.
The government wants to extend the provisional gasoline taxwhen it expires on March 31 to avoid a revenue gap for nationaland regional budgets for 2008/09.
Democrats and other critics say the tax symbolizes theLDP's penchant for wasteful spending on vested interests andwant it abolished. The Democrats also argue that other revenuesdedicated to building roads should be freed up for other typesof spending.
"We cannot accept something that is just a postponement (ofa decision)," Hatoyama said, referring to a ruling blocproposal for compromise.
PM CENSURE MOTION?
Fukuda last week instructed the ruling parties to seek adeal based on a proposal that would ensure enactment ofbudget-related bills including the gasoline tax by March 31, intime for the start of the new fiscal year the next day.
In return, the government would consider using tax revenuescurrently dedicated to road construction for general spendingas part of future reforms from an unspecified date.
"They are asking that we accept enactment of thebudget-related bills before the fiscal year end," Hatoyama saidon public broadcaster NHK. "We cannot accept this at all."
Without a deal, the provisional gasoline tax will expire,resulting in a 25 yen cut in prices many consumers wouldwelcome.
The ruling bloc can revive the tax by using its two-thirdsmajority in the lower house, but can only do so after the billhas either been rejected by the upper house or 60 days havepassed since it was first approved in the lower house onFebruary 29.
Asked if the Democrats would submit a censure motionagainst Fukuda in the opposition upper house if the ruling blocrevived the tax, Hatoyama told NHK: "That is definitelypossible."
The censure motion would not be legally binding, but wouldbe a further blow to Fukuda, whose support ratings have alreadyfallen to around 30 percent on doubts about his leadership.
(Editing by Bill Tarrant)