Prime Minister Yoshiro Mori on Monday officially apologized for having appointed scandal-tainted Kimitaka Kuze as chief of the Financial Reconstruction Commission, telling the Diet he was not fully aware of Kuze's shady background.

"I apologize to the public for the fact that I appointed a man who would consequently have to quit," Mori told the Lower House plenary session.

Mori maintained that the factors that led to Kuze's resignation Sunday were incidents that were revealed after Kuze assumed the post.

The background check on Kuze, carried out by Liberal Democratic Party officials, was based only on past media allegations made available before his July 4 appointment as FRC head, the prime minister explained.

Mori's apology came after Yukio Hatoyama, leader of the Democratic Party of Japan, criticized him during the session for having appointed a "problematic" figure as the nation's top financial regulator.

Kuze, a 71-year-old Upper House member of the LDP, was replaced Sunday by former Economic Planning Agency chief Hideyuki Aizawa, 81, after recent news reports revealed that he had received benefits totaling 230 million yen from Mitsubishi Trust & Banking Corp. over a seven-year period until 1995.

This was followed by fresh revelations over the weekend that Kuze received 100 million yen from the president of condominium builder Daikyo Corp. to help put his name higher on an LDP proportional representation list of candidates.

Opposition parties claim Kuze violated laws because he continued receiving advisory fees from Mitsubishi Trust while serving as a vice minister of the Agriculture, Forestry and Fisheries Ministry earlier in the decade. They also noted that Kuze failed to list the benefits he received from those firms on his official political fund revenue reports.

Top opposition leaders, as well as the media, have lashed out at Mori for handing Kuze a Cabinet post even though an anonymous letter detailing Kuze's financial ties with those firms was circulated among senior LDP officials on July 3, one day before Kuze's appointment.

Chief Cabinet Secretary Hidenao Nakagawa told a press conference earlier Monday that it is his understanding that the anonymous letter "did not reach the prime minister directly."

Nakagawa admitted that the latest Cabinet ouster stemmed from the LDP's failure to investigate Kuze thoroughly before his appointment and Kuze's own controversial explanation.

"I have to tell future Cabinet ministers that any issues remaining unreported could trigger problems afterward," Nakagawa said.

Meanwhile, market concerns over how Aizawa, an LDP conservative who had opposed a series of proposed deregulation measures, will drive the economy helped fuel the Nikkei 225 average's 111 yen.08-point plunge to 15,727.08 yen by the end of Monday trading on the Tokyo Stock Exchange.

With the Kuze scandal, the opposition camp is pressing even harder for new legislation to ban politicians from receiving goods and money in exchange for favors before the current Diet session ends Aug. 9.

"We believe the bill (we have submitted) should be enacted during the current Diet session, even if we need to extend the session," Social Democratic Party leader Takako Doi told the Diet on Monday.

The opposition camp is calling for Diet deliberations on the bill, which was jointly submitted by four opposition parties last month, while the ruling coalition -- the LDP, New Komeito and the New Conservative Party -- is still in the process of drawing up a similar bill.

The ruling triumvirate's version is expected to be submitted in the next Diet session, which is expected to be held in autumn.

DPJ freshman slams Mori

Hiroko Mizushima, a freshman of the Democratic Party of Japan, criticized Prime Minister Yoshiro Mori's policy speech Monday, saying it lacked concrete measures to tackle education and welfare issues.

It is usually the senior party members who ask questions to the prime minister during a Lower House plenary session, but DPJ head Yukio Hatoyama asked Mizushima, who was elected for the first time in the June general election, to deliver a speech in a bid to showcase the party's "youthfulness."

Mizushima, a 32-year-old psychologist-turned politician, criticized Mori for giving a "superficial policy speech which lacked specific measures" to combat issues such as bullying in schools and the so-called classroom collapse.

"I don't think matters can be solved by realizing the prime minister's educational reform," she said. "I believe the prime minister is trying to force his values (on children)."

She also said the government should revise the civil law to allow couples to obtain different last names and ban discrimination between legitimate and illegitimate children who inherit parents' assets.