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A war of words between the ruling and opposition camps over political funding is expected when the extraordinary Diet session kicks off Tuesday.

The gloves will likely come off as the two sides debate revisions to the Political Funds Control Law following a scandal in which a 100 million yen donation from the Japan Dental Association was not properly reported by its recipient, the Liberal Democratic Party’s largest faction, then headed by former Prime Minister Ryutaro Hashimoto.

The Democratic Party of Japan has called on the other opposition parties — the Japanese Communist Party and the Social Democratic Party — to form a united front to address the donation scandal.

Prime Minister Junichiro Koizumi indicated Thursday he would consult with the LDP and its coalition partner, New Komeito, before working to enact amendments to the law during the 53-day legislative session.

“We’ll also listen to what the DPJ has to say,” Koizumi told reporters in Hanoi, where he is attending the Asia-Europe Meeting. “The issue also affects how political parties, including the opposition, are going to procure funds.”

The law bans companies and organizations from making contributions to individual lawmakers or party factions. It limits the amount of donations to a political party to 100 million yen, but sets no ceiling on donations made between political organizations — a loophole that critics say is often exploited.

At the urging of Koizumi and New Komeito, the LDP is drafting revisions that would set upper limits on donations between political bodies set up by party factions or individual lawmakers, but not organizations designated by the parties themselves.

The DPJ is meanwhile preparing a bill that would prevent political donations from being earmarked for specific lawmakers through political parties and their political organizations.

But according to JCP chief Kazuo Shii, “The most and only effective way is to totally ban donations from companies and organizations.”

Amid such discord, it is unclear whether the opposition parties can stick together as deliberations progress.

A fierce battle is also expected between the ruling and opposition parties over whether to summon four lawmakers to testify in the Diet over their alleged involvement in the dental association donation scandal.

The four are: Hashimoto, who resigned as faction head to take responsibility for the dental body donation scandal; former LDP Secretary General Hiromu Nonaka; Mikio Aoki, chairman of the LDP caucus in the House of Councilors; and former Chief Cabinet Secretary Kanezo Muraoka, whose case has been sent to prosecutors in connection with the donation.

“We want to shed light on the facts (surrounding the scandal) and would like those concerned to appear” before the Diet, DPJ Secretary General Tatsuo Kawabata said during a recent TV interview. “The most important thing is to make (clarification of the facts) a prerequisite” to debate on the political fund law.

Muraoka said Friday he would be willing to testify if the Diet decides to summon him. The extraordinary Diet session will also see the two sides lock horns on issues such as pension reform and the government’s continued support of the U.S.-led war on Iraq, despite increasing doubts over whether Baghdad ever possessed weapons of mass destruction.

Iraq could pose another headache for the ruling coalition; the opposition will be armed Thursday with a report by the top U.S. arms inspector stating that there was no evidence that Iraq had weapons of mass destruction after the 1991 Gulf War.

The opposition was quick to pounce on the findings, criticizing Koizumi for misleading the public about the need to support the U.S.-led war.

The report shows there was no reason to open hostilities against Iraq, Yukio Hatoyama, foreign minister of the DPJ’s shadow Cabinet, said in a statement Thursday night.

The DPJ is also preparing a bill that would scrap the government-sponsored reforms designed to increase pension premiums and cut benefits over 19 years without any structural overhaul of the existing pension schemes. It is calling instead for the pension programs for salaried workers and the self-employed to be integrated.

The ruling coalition and key DPJ supporter Japanese Trade Union Confederation (Rengo) are urging the main opposition force to join them to discuss comprehensive social security reform in accordance with a May agreement between the DPJ and the ruling parties.

But the DPJ has refused to honor the pact because the ruling coalition rammed the government-sponsored pension reform legislation through the Diet in June.

The DPJ is demanding that the ruling coalition first present its position on pension integration, including a consumption tax increase and the introduction of a system to assign identification numbers to taxpayers, both of which the DPJ advocates.

DPJ leader Katsuya Okada has said the opposition will not place too much weight on debate over Koizumi’s postal privatization project.

The government hopes to introduce to the Diet in spring legislation in line with Koizumi’s basic plan to privatize postal savings, “kampo” postal life insurance and postal services, and remove postal workers’ public servant status by splitting Japan Post into four units in 2007.

Many LDP lawmakers oppose postal privatization because the postal organization has been a solid vote generator for the party. The DPJ is divided over the issue because it is backed by civil servants’ unions. Okada said his party will wait for the government to iron out these differences and come up with a concrete reform plan before the DPJ launches full-scale Diet debate on the issue.

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