Monday’s rejection by the House of Councilors of the postal privatization bills has left the long-ruling Liberal Democratic Party sharply divided as it faces a general election in the coming weeks and a possible fall from power.

The LDP, which has enjoyed almost uninterrupted single-party rule since 1955, has seen its power wane since the early 1990s. It has only managed to hang on to the reins of government through coalitions and, since Prime Minister Junichiro Koizumi’s inauguration in April 2001, his charisma and popularity.

But many LDP members have been at odds with Koizumi’s austere fiscal policy goals and perceived dictatorial style, which critics say ignores the party’s usual decision-making process and lessens the influence of individual lawmakers.

The long-festering frustration finally exploded as the prime minister tried to push through his long-held postal privatization agenda. Rivals are now rushing to demonstrate they can fill Koizumi’s shoes when his term as party president expires in September 2006.

Neither the anti-Koizumi nor pro-Koizumi camps in the LDP wanted an election, but they played chicken down to the wire and never blinked.

“No one wants to see a dissolution of the House of Representatives,” said a senior government official close to Koizumi. He said the Lower House LDP members who voted against the postal bills last month urged him last week to beg Koizumi to drop his election threat.

“But it’s too late,” the official said. “How could they say such a thing now?”

The LDP will likely suffer a major setback in the Sept. 11 election, and the LDP-New Komeito ruling coalition may fall from power, many LDP members said.

But whether the Democratic Party of Japan, the largest opposition force, can win a majority in the Lower House and single-handedly form a government is another question, analysts said.

When the postal bills were put to a Lower House vote last month, 37 LDP members voted against them, and Koizumi said Monday the party will not officially endorse the dissidents in the coming election.

The LDP now holds 249 seats in the 480-seat chamber, which has the final say in electing the prime minister, and New Komeito holds another 34.

Because Koizumi has also told LDP officials to field candidates in all constituencies, the vote will likely be split if the 37 rebels run as independents, making it more likely for the ruling coalition to lose these seats, plus additional seats in the proportional representation segment of the election that the LDP won in the last race thanks to the votes won by those 37 members.

In addition, according to election analyst and consultant Hiroshi Miura, Koizumi himself may not garner strong voter support, as media polls have shown few eligible voters place priority on postal privatization as a policy issue.

“There will be no advantage for the LDP (as a whole), for rebellious members of the LDP or for Koizumi himself in the election,” he said.

But the DPJ won’t win an overwhelming majority either, Miura added.

As he pointed out, as far as postal reform is concerned, the DPJ failed to offer a different position and only watched from the sidelines as Koizumi battled forces within his own party over the bills.

“My prediction is that the DPJ will win only around 20 more seats,” thus coming out of the poll with about 196 of the 480 chamber seats.

The DPJ hopes to avoid this scenario by campaigning on issues other than postal reforms, including an anticipated consumption tax increase and public pension system reforms.

In fact, the DPJ’s tentative campaign slogan states: “There are more important things” than postal privatization.

“Voters are not interested in postal issues,” DPJ President Katsuya Okada said Aug. 1 at the Japan National Press Club. “I don’t think they will be a contentious focus of the election.”

But if election analyst Miura is right, no party will win a single-party majority, and negotiations to form a ruling coalition will follow the election, throwing national-level politics into greater chaos.

Officially, both New Komeito and the DPJ have denied entertaining the notion of forming an alliance, which is only natural because they will be locking horns in the election.

But New Komeito, the third-largest party in the Diet, following the LDP and DPJ, is widely viewed as playing a key role in forming the next ruling coalition should no party win a majority in the Lower House.

On July 27, New Komeito Secretary General Tetsuzo Fuyushiba did not deny the possibility of joining hands with the DPJ, telling the Japan National Press Club, “We don’t want to join hands with the DPJ, but we should not hesitate if it’s the only way to stabilize politics.”

But New Komeito President Takenori Kanzaki rushed to say that same day his party had never debated this option.

Meanwhile, key LDP Lower House members who voted against the postal bills are exploring the chance of rejoining the LDP after the election, if Koizumi voluntarily steps down or is ousted as party president due to an electoral defeat.

During a Sunday talk show, former LDP policy chief Shizuka Kamei, a key foe of the postal bills, said he has already discussed a postelection alliance with former Prime Minister Yoshiro Mori, who heads the most powerful faction in the LDP.

“I told Mr. Mori we should think about joining hands so we won’t become opposition parties” after the election, Kamei said.

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