An ugly battle over political funds totaling as much as ¥1.33 billion has broken out as Japan's No. 2 opposition party works its way through a bitter internal split.

About 17 Osaka-based Diet members are reportedly leaving Ishin no To (Japan Innovation Party) to join another national party led by Osaka Mayor Toru Hashimoto.

The Osaka-based members have demanded Ishin no To be formally split into two new political parties, and that government subsidies for Ishin no To also be divided.