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.