Japan finance minister may face censure

TOKYO (Reuters) - Japan's finance minister faced a possible parliamentary censure on Tuesday after denying he was drunk at a G7 news conference, as the furore over his behaviour dealt a fresh blow to unpopular Prime Minister Taro Aso.

The minister, Shoichi Nakagawa, would hold a news conference at 12.30 p.m. (3:30 a.m. British time), a finance ministry official said.

Aso asked his close ally Nakagawa to stay in his post on Monday, but Kyodo news agency quoted a senior executive of the ruling Liberal Democratic Party (LDP) as saying the minister should quit before the day was over.

"He should resign by the end of today, taking responsibility for showing disgraceful behaviour to the world," the lawmaker, who was not identified by name, was quoted as saying.

Emboldened opposition parties were set to grill Nakagawa again in parliament and have said they would submit a censure motion to the upper house, which they control, if his answers fail to satisfy. A censure is non-binding, but a previous cabinet minister quit after a similar resolution.

The fuss over Nakagawa's behaviour at the G7 news conference comes as Aso's public support is plummeting -- below 10 percent in one survey published on Sunday -- ahead of an election that must be held no later than October and as the economy sinks deeper into recession.

Surveys show the main opposition Democratic Party of Japan has a good shot at ousting Aso's Liberal Democrats, ending more than 50 years of almost unbroken rule.

Consumer Affairs Minister Seiko Noda said the fate of Nakagawa, who has blamed his performance on too much cold medicine, should be decided by the minister or Aso himself.

"It was a shocking video if one didn't know the circumstances," she said of the video of the Group of Seven news conference in Rome, where Nakagawa slurred his words and appeared to fall asleep at one point.

BLOW TO ASO

Japanese media had harsh words.

"It was a sloppy performance that damaged our country's interests. Prime Minister Taro Aso can not neglect this situation that symbolises the slackness in his administration," the Mainichi newspaper said in an editorial on Tuesday.

"The (opposition) Democratic Party is considering a censure motion against Nakagawa, but the prime minister himself must show responsibility for the weakening morals in his administration.

Nakagawa, 55, repeated on Tuesday that he had not done more than sip some wine before the news conference at the end of the Group of Seven meeting of finance leaders in Rome on Saturday.

He said cold medicine had affected his behaviour and he would submit a doctor's note about the drugs he took on the trip.

"It's true that there was wine in front of me. I sipped but it's not like I drank," Nakagawa told reporters.

Nippon Television reported that he had gone to the hospital for checks ahead of an expected appearance in parliament.

If Nakagawa is forced to quit, analysts said, it would be a heavy blow to Aso, struggling to keep his own grip on power after a series of gaffes and policy flip-flops. A departure, however, was unlikely to have much effect on economic policies.

Health and Labour Minister Yoichi Masuzoe told reporters that it would be ill-advised to replace Nakagawa, who is in charge of the budget as well as banking supervision, at the present time.

"It would be a minus to change the minister in charge of the budget at time when the budget is being debated in parliament," Masuzoe told reporters.

Some ordinary voters agreed, saying it was bad for Japan to have Nakagawa's behaviour spread all over the Internet.

"That was very embarrassing as a finance minister. It was everywhere on YouTube, too," said Motoyuki Iwai, 31-year-old employee at an insurance company.

"I think he should take responsibility and quit, but as parliament is still debating the budget, it would be troublesome if it affects what's happening in parliament.

Aso is trying to enact an extra budget for the fiscal year ending on March 31 as well as a record 88.5 trillion yen ($965 billion) budget for the year to March 2010 to help stimulate the economy, now sinking deeper into recession.

There have been calls for additional stimulus after data released on Monday showed the world's second biggest economy in its sharpest quarterly decline since the 1974 oil crisis.

Global downturn has slashed demand for Japan's cars, tech and other exports and economists warn of more pain ahead.

($1=91.68 Yen)

(Additional reporting by Chisa Fujioka; Writing by Linda Sieg, Editing by Dean Yates)