OSAKA — Osaka Gov. Toru Hashimoto suffered his first major political setback early Tuesday when a proposal to move the prefectural headquarters to the World Trade Center building in the harbor district was voted down.

After a marathon session that began Monday afternoon, the prefectural assembly voted 65 to 46 against the move, with one vote invalidated. The final tally came just a few minutes before 2 a.m.

The proposal to relocate from the 80-year-old-plus prefectural headquarters adjacent to Osaka Castle Park to the city-run World Trade Center has long been pushed by local Liberal Democratic Party elements as well as the major Kansai business groups.

But local media polls showed many Osaka residents opposed the move or were unsure of its prudence.

When Hashimoto became governor with the backing of the LDP and the corporate community in January 2008, he was told the move was necessary as part of efforts to create a Kansai regional bloc and to receive central government money to rebuild the Osaka Bay area.

Hashimoto agreed, and starting in August he aggressively pushed the plan.

The World Trade Center, which opened in 1994 in the Nanko harbor district, about an hour from central Osaka, has been bleeding red ink since it opened and is a national symbol for the extravagant, white elephant local government projects undertaken in the 1990s.

The Osaka Municipal Government hoped relocating the prefectural headquarters there would ease its own dire financial situation.

The LDP’s coalition partner, New Komeito, opposed the move, however, as did many veteran LDP politicians. The Democratic Party of Japan was split, and the Japanese Communist Party was opposed.

It became clear in the days leading up to the assembly vote that Hashimoto would not get the two-thirds majority needed.

Following Tuesday’s decision, Hashimoto, who said last weekend that those in the ruling or opposition camps who supported him would be politically rewarded later, tried to make the best of the situation.

“Japan is not North Korea, and the assembly has decided. If I got my way all of the time, I’d be a dictator,” Hashimoto said at a news briefing immediately following the vote.

Senior Kansai business leaders also voiced dismay.

Kansai Economic Federation Chairman Hiroshi Shimozuma said the move was supposed to have been the gunpowder to ignite development of Osaka and the Kansai region.

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