By Chisa Fujioka
TOKYO (Reuters) - Outspoken nationalist Taro Aso, anadvocate of spending and tax cuts to boost the economy, won therace on Monday to become Japan's next prime minister andswiftly set his sights on an election expected within months.
Aso, a former foreign minister, clinched the ruling LiberalDemocratic Party leadership vote by a landslide to take overfrom Yasuo Fukuda, who quit this month just as the economyflirts with recession and faces further damage from turmoil onWall Street.
"As I travelled around the regions, I became even moreconvinced that the economy was in a recession," Aso, 68, told anews conference after winning the leadership, adding hispriority was to revitalise the economy before tackling a hugepublic debt.
However, Aso may have little time to revive the world'ssecond-biggest economy if, as media and pundits predict, hecalls an early poll for parliament's powerful lower house.
"Standing here, I feel that this is Taro Aso's destiny,"Aso, the grandson of a premier, told LDP members after winning351 of 525 valid votes cast by party lawmakers and chapters.
"But the LDP, as the government party, must resolutelyfight the (opposition) Democratic Party in the next election,and only when we have won that election will I have fulfilledmy destiny.
Aso, set to be voted prime minister on Wednesday by virtueof the ruling bloc's majority in parliament's powerful lowerhouse, will be Japan's third prime minister in a year. Both hispredecessors quit in the face of a deadlocked parliament, wherethe opposition controls the upper house and can stall bills.
"It's going to be a weak government and there is going tobe an election and there will probably be a weak government asa result of the election," said Columbia University professorGerry Curtis. "Japan will not be in a position to play a moredynamic role in world affairs. It will be more and moreinward-looking."
The ruling bloc is expected to lose in the next electionthe two-thirds lower house majority that allows it to overrideupper house vetoes, and analysts say a clear victory for eitherside camp may prove elusive, leaving more policy paralysis.
TAPPING RIVALS, EYEING POLLS
One voter predicted that, with many longing for change, thelong-ruling LDP could lose its grip on power altogether.
"The Liberal Democratic Party is already finishedregardless of who got elected," said 52-year-old advertisingproducer Youji Nomura. "The LDP is completely corrupt, and Idon't think the new prime minister would last even a year, nomatter who it is."
Aso, who wants tax cuts for businesses and stock investors,has said Japan's goal of balancing its budget by 2012 could beput off, a stance that has alarmed fiscal reformers in hisparty but charmed local party machines looking toward theelection.
Aso won five times the votes of his nearest rival to clinchthe top post on his fourth attempt to lead the party.
Economics Minister Kaoru Yosano, a fiscal conservative, wasa distant second with 66 votes and former defence ministerYuriko Koike came in third with 46 votes for her bid to becomeJapan's first female prime minister.
Japanese media said Aso was considering keeping Yosano in anew cabinet to be formed on Wednesday as well as tappinganother rival, former defence minister Shigeru Ishiba, in aneffort to unify the party, which is suffering from dismal voterratings.
Though inclined to view China's rising clout with concern,Aso is likely to stick to Fukuda's diplomatic stance thatstresses Japan's tight security alliance with the United Statesand stable ties with China, which have warmed after years ofstrains due bitter wartime memories and regional rivalry.
He is likely to stay away from Tokyo's Yasukuni Shrine,seen by Beijing as a symbol of Japan's past militaryaggression, although analysts say his tendency toward verbalgaffes that offend at home and abroad could prove a problem.
Aso, a dapper dresser and fan of manga comic books popularwith young people, regularly tops voter surveys for next primeminister, making him the LDP's natural choice to lead it in ageneral election that must be held by next September.
Japanese media say an election could be called for as earlyas October 26 to make the most of any bounce in public support,although Aso has said his priority was to pass an extra budgetto support the economy.
The new leader would be seeking a mandate to break adeadlock in parliament, but with both sides facing a toughbattle, speculation is rife over a possible rejigging of partyallegiances, although an attempt by Fukuda and main oppositionDemocratic Party leader Ichiro Ozawa to form a "grandcoalition" flopped last year.
(Additional reporting by Yoko Kubota, Isabel Reynolds,Naoto Okumura and Linda Sieg; Editing by Rodney Joyce)