(Reuters) - Japanese political heavyweight Ichiro Ozawa and 51 other lawmakers will quit the ruling party over a plan to increase the sales tax, an aide said on Monday, although the government will retain its majority in the powerful lower house of parliament.
Forty lower house members and 12 in the upper chamber will resign from the ruling Democratic Party of Japan (DPJ), the aide told reporters. That will bring down the ruling party's numbers in the 480-member lower house to 249 from 289.
The departure of Ozawa and his followers means Prime Minister Yoshihiko Noda could be in a better position to consolidate his grip on his fractious party, although he will still need opposition help to pass laws since rival parties control the upper house, which can block bills.
The plan to double the sales tax to 10 percent in three years to help curb ballooning public debt was passed by parliament's lower house last week with the help of the opposition. But 57 lawmakers in the ruling Democratic Party voted against it, with 15 others abstaining or absent.
Ozawa, a 70-year-old former DPJ leader, has argued the planned tax hike violates campaign pledges made when the Democrats swept to power three years ago, promising to curb the powerful bureaucracy and cut wasteful spending before raising taxes.
Noda, a former finance minister, has insisted it is vital to get Japan's fiscal house in order and find ways to fund the bulging social welfare costs of a fast-ageing population.
Japan has suffered a string of credit downgrades in the past two years largely because of its failure to make progress in tackling its debt, already twice its economic output and the worst among advanced industrialized countries.
While the tax plan's approval in the lower house marks a milestone for a nation long trapped in a cycle of revolving-door governments and policy gridlock, it comes at a political and economic price.
Many people are also wary of raising the tax at a time when Japan's recovery from last year's triple blow of a big earthquake, tsunami and nuclear crisis is not yet assured.
Ozawa, whose mastery of backroom deals cut during his four-decade political career earned him nicknames of "Shadow Shogun," has suffered a series of setbacks in the past few years.
The man credited by many with orchestrating the Democrats' historic victory in 2009 lost a party leadership race in 2010 to then-prime minister Naoto Kan and in June last year failed to oust Kan in a no-confidence vote. Last year, Noda defeated a candidate backed by Ozawa to succeed Kan.
Ozawa has loomed large on Japan's political stage for more than two decades, but many analysts see his influence waning, one reason being a generational shift in political circles and voter distaste for the old style, back-room politics he came to symbolize.