Finally ending a long-running and ugly battle over political funds, Osaka-based members of Ishin no To (Japan Innovation Party) and those outside of the prefecture signed a statement of reconciliation Tuesday, agreeing to split the party's ¥1.5 billion in government subsidies and return money left unused to the government by the end of the month.

The Osaka-based members created a new party called Osaka Ishin no Kai on Oct. 31, which challenged the legitimacy of Ishin no To, led by President Yorihisa Matsuno.

The Osaka members, who held the party's bankbook and inkan seal, refused to hand them over to the Ishin no To executives outside of the prefecture.

The seal can be used to legally disband Ishin no To by filing an application with the Internal Affairs and Communications Ministry.

The Osaka members also demanded Ishin no To stop using the word "Ishin" (Reformation) in its party name.

In response, the non-Osaka members filed a suit against their rivals and requested the bank freeze the party account, into which subsidies are paid every quarter by the central government.

"After all, viewed from outside, this is an internal argument. . . . I'm really relieved to see its settlement," Masato Imai, secretary-general of Ishin no To, said after the ceremony to sign the deal.

Under the agreement, the two groups will unfreeze the bank account, the balance of which will stand at ¥1.5 billion after the next quarterly subsidy is paid Dec. 18.

Members of each side will then settle payments for their political activities by the end of December, and the remaining money will be returned to the government's coffers, according to the joint statement.

Ishin no To will be allowed to retain its party name until "the realignment of opposition parties takes place," the document reads.

The two groups also agreed to return about ¥100 million in membership fees paid by about 50,000 rank-and-file party members before the departure of the Osaka-based group, said Nobuyuki Baba, a leading member of Osaka Ishin no Kai.

"I still have questions on the legitimacy (of the party led by) Matsuno," Baba said. "But we have signed the agreement, and we will stop arguing over this minor issue."

Ishin no To, once touted as a rising "third force" in Japanese politics, had long been bedeviled by the division between Osaka-based members led by Mayor Toru Hashimoto and non-Osaka members led by Matsuno.

The former were willing to cooperate in the Diet with the ruling bloc led by Prime Minister Shinzo Abe, while the latter worked to maintain its position as an ardent opposition force.

After Hashimoto and his followers left the party in October, the Osaka and non-Osaka groups strongly criticized each others, frequently resorting to abusive language.

Hashimoto's departure from the party and his verbal assault on non-Osaka members were widely seen as an effort to draw public attention and drum up voter support for candidates he had backed in last month's Osaka mayoral and gubernatorial elections.