Yukio Hatoyama, deputy secretary general of the Democratic Party of Japan, officially declared his candidacy Thursday for the DPJ's presidential election next month, seriously clouding the prospect of incumbent leader Naoto Kan's re-election.

"I have decided to run after consulting with fellow members. I'll raise a flag of new liberalism against the growing conservatism of all (political forces)," Hatoyama said during a press conference in Tokyo where he declared his intention to join the race.

With Hatoyama's candidacy expected to be followed by two other high-profile members, the upcoming DPJ presidential race will likely be a confused fight, darkening the chances for incumbent President Naoto Kan.

Earlier Thursday, Hatoyama conveyed his decision to Kan at DPJ headquarters.

Kan, who announced Tuesday he will seek his third term as party head, is expected to face a tough battle in the upcoming contest, set to be held Sept. 25. Kan is rapidly losing clout among his party colleagues as the largest opposition party has suffered a steady decline in popularity over the past year.

Takahiro Yokomichi, chairman of the DPJ executive council, indicated the same day that he will also challenge Kan in the race. Yokomichi, a former governor of Hokkaido, told a labor leader that he would make a decision "within a day or two."

Yokomichi's candidacy is likely to further darken prospects for Kan, since Yokomichi, also a former Socialist legislator, is believed to have the support of the DPJ's left-leaning members who might not vote for Hatoyama.

Moreover, Lower House member Tetsundo Iwakuni is also said to be contemplating a run.

"I intend to make up my mind next week after seeing whether Mr. Hatoyama is serious about drastic party reforms," he said, implying a possible alliance with Hatoyama.

Candidates will officially register for the election Sept. 11.

During the press conference, Hatoyama said he will put more emphasis on tighter budgets than Kan did to promote economic structural reforms, rather than pushing further pump-priming measures to stimulate demand.

"I think there are slight differences in economic policy with Kan," Hatoyama said.

But both Hatoyama and Kan repeatedly stressed that their trust in each other will remain unchanged despite the presidential race, apparently fearing disagreement between them could seriously divide the party.

Hatoyama said the DPJ, since its inception in 1996, has depended too heavily on Kan as party chief, and that it now needs to show voters a variety of policies and leaders to win the upcoming Lower House general election.

"I'm not saying that Kan wouldn't do (as party leader)," Hatoyama said.

Dissatisfaction is brewing over Kan's leadership, and political analysts say a showdown with Hatoyama would further split a party already plagued by internal division.

The DPJ's support rate plummeted to 10.4 percent in a poll conducted by Kyodo News in late May, a marked decline from the 22.8 percent it had last September.

Meanwhile, 19 DPJ members who once belonged to the defunct Democratic Socialist Party met to discuss the election and a large majority expressed support for Hatoyama, group sources said.

Hatoyama and Kan shared the DPJ leadership when it was launched in September 1996.

Kan became the party's sole leader in April 1998 when it expanded by absorbing former members of other parties. Kan was re-elected as president early this year, beating out Shigefumi Matsuzawa.

But Kan's popular support has steadily declined since last fall, when he came under the media spotlight over an alleged affair with a female aide. His leadership was also thrown into question as the DPJ remained almost powerless as the administration of Prime Minister Keizo Obuchi solidified its power with the help of the LDP's coalition partner, the Liberal Party, and the No. 2 opposition party, New Komeito.