Ishin no To (Japan Innovation Party) on Thursday expelled Osaka-based lawmakers who demanded that its leadership split the party in two and divide its political funds accordingly.

The ousted individuals comprise 12 Diet members and 153 local assembly members who are also members of a local party led by Osaka Mayor Toru Hashimoto.

The rift centers on differing views about the party's direction. The Osaka group is willing to cooperate with the administration of Prime Minister Shinzo Abe, whereas Tokyo-based members believe Ishin should link arms with the opposition. Ishin is the nation's second-largest opposition party.

"We've been seeking ways to solve this issue amicably. ... Sadly, I believe (the party is) effectively in a state of splitting," Ishin President Yorihisa Matsuno told a news conference following a gathering of the party's Diet members. "It's really heartbreaking, but we needed to protect the organization."

The 12 expelled Diet lawmakers are expected to join a new national party Hashimoto will launch later this month.

They include Nobuyuki Baba, Ishin's former Diet affairs chief. The group had demanded the party's division and a sharing out of its ¥1.33 billion unspent political funds.

The leadership's decision followed attempts by Osaka-based lawmakers to hold an extraordinary party convention — a decision-making forum — later this month, to select a new leadership and then to formally split it in a way that allows the proportional distribution of political subsidies.

Of a total of ¥2.66 billion allocated for Ishin this year, the party is set to receive over ¥1 billion in total on Oct. 20 and Dec. 20.

The leadership decided earlier this month to reject the demand for a splitting of the party.

Tokyo-based members led by Matsuno have been seeking ways to merge with the Democratic Party of Japan before the next summer's Upper House election in the hopes it will help them survive.

Among the Ishin's 51 Diet members, around 16 members are expected to join Hashimoto's new party, while at least 27 members will remain in the party. The others are yet to decide, media reports have said.