Despite his re-election as president of the ruling party, Prime Minister Naoto Kan maintained a serious face immediately following his victory Tuesday afternoon over Ichiro Ozawa.

Kan is well aware of the daunting political challenges that lie ahead, in particular the divided Diet and the ongoing power struggle within his Democratic Party of Japan, which many analysts say may result in a major realignment of political forces.

Now attention is pinned on Ozawa’s next move, and whether he will continue his ambition to amass more power within the DPJ or leave the party altogether and form a new political force with some of his followers.

Political commentator Harumi Arima said Ozawa will be forced to leave the DPJ if he is indicted over his alleged mismanagement of political funds.

“The party would probably issue a recommendation for him to leave the DPJ or even expel him,” Arima said. “Ozawa would leave the party if that is the case.”

Ozawa faces an automatic indictment if an independent judicial review panel, called the Committee for the Inquest of Prosecution, concludes for the second time that he should be charged with falsifying his political funding records.

Only a handful of Ozawa followers, a dozen at best, would leave with him, Arima predicted, but it would still be a loss for the DPJ, which lacks a majority in the Upper House even with coalition partner Kokumin Shinto (People’s New Party).

“There are rumors that Kan is already talking about a possible alliance with Koichi Kato of the Liberal Democratic Party,” Arima said. “That would trigger a political realignment.”

Ozawa is also rumored to be in talks with LDP bigwigs like former Prime Minister Yoshiro Mori and former party Secretary General Makoto Koga.

But with no prospects that Ozawa and his supporters could actually cast Kan out and take the helm of state with the help of the LDP and New Komeito, leaving the DPJ would only weaken his political clout.

If he stays, the internal rift is likely to fester, especially if Kan refuses to grant key party and Cabinet posts to Ozawa and his followers.

“The election is over. As I have promised there are ‘no sides,’ ” Kan said after he had won.

“The symbolic post would be secretary general,” said Norihiko Narita, president and political science professor at Surugadai University in Saitama Prefecture.

To show that the DPJ has healed its fissures, Kan may appoint a DPJ lawmaker from the Ozawa side as secretary general, Narita said, while perhaps retaining his close aide Yoshito Sengoku as chief Cabinet secretary.

Kan faces a dilemma in reshuffling the party and Cabinet posts, said a DPJ member who talked on condition of anonymity.

“If he grants key posts to the Ozawa group, the public will criticize Kan for compromising,” the DPJ member said. “If he excludes the Ozawa group from key posts, it will trigger ill feelings that would cause them to rebel against Kan.”

One possibility, he said, is that the Ozawa group could vote for or abstain from voting for a censure motion that may be submitted by the opposition camp in the Upper House or even a motion of no confidence submitted in the Lower House. Passage of a nonconfidence motion in the Lower House would automatically force the prime minister to step down or dissolve the chamber.

“Ozawa will try to retain his political power by threatening Kan,” he said.

Whether the Ozawa group will actually engage in such extreme tactics is an open question. But for Kan, a more imminent task is how to deal with the divided Diet.

Without the support of the opposition, Kan’s administration will not be able to clear key bills. Kan has called for a partial alliance with opposition parties on a case-by-case basis.

Narita of Surugadai University said Kan will need to seek Ozawa’s support when his administration faces a political deadlock next March when budget-related bills to implement the fiscal 2011 budget are deliberated in the Diet.

Because the DPJ-led government has a majority in the Lower House, the budget will clear the Diet even if it is voted down in the Upper House. But that is not the case for bills related to the budget.

“That’s when Ozawa comes in,” Narita said. “Ozawa has connections with the LDP and New Komeito and there will be a role for him to play.”

Ozawa resolved KYODO Ichiro Ozawa, after losing the Democratic Party of Japan presidential race, expressed his resolve Tuesday to work hard for the administration’s success.

“As one rank-and-file member, together with you all, I will do my best to make the DPJ-led government successful,” Ozawa said in a meeting with supporters after the election results were announced.

During the 10-minute meeting of about 120 lawmakers, DPJ Vice President Kenji Yamaoka noted it was “very significant” that Ozawa did as well as he did despite Kan’s momentum heading into the balloting.

Overall, Kan won 721 points to 491 points for Ozawa, but based only on votes from DPJ Diet members, Kan secured 412 points against Ozawa’s 400 points.

Also present at the meeting was former Prime Minister Yukio Hatoyama, who apologized for failing to help clinch the victory for Ozawa.

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