The Tuesday arrest of Democratic Party of Japan leader Ichiro Ozawa's chief secretary was an unexpected blow for the largest opposition party but observers say the damage can still be contained ahead of a general election later this year — if Ozawa quits his post.

During a news conference Wednesday morning, Ozawa vowed to stay on as party president after stressing that both he and his secretary, Takanori Okubo, were innocent of allegations that his political funds management body knowingly accepted illegal donations from scandal-tainted Nishimatsu Construction Co.

Jiro Yamaguchi, a political science professor at Hokkaido University and a close observer of the DPJ, said that although he realizes Ozawa's dilemma, the DPJ leader should step aside before further damage is inflicted on the party.