Prime Minister Yoshihiko Noda's Cabinet on Friday approved an outline of integrated social security and tax reforms to pave the way for raising the consumption tax, betting the administration's fate on the unpopular levy hike aimed at warding off a looming fiscal crisis.

Noda's Democratic Party of Japan will face huge political difficulty getting the related bills through the divided Diet. The DPJ has failed to win support from the opposition bloc led by the Liberal Democratic Party, which controls the Upper House.

Opposition forces instead have called on Noda to dissolve the Lower House to put the tax hike to a vote by the public. If the ruling bloc suffers a crushing defeat in the next election, the resulting chaos would lead to a dramatic realignment of political forces, analysts say.