Prime Minister Shinzo Abe has made a drastic policy compromise amid a series of deepening revelations over a faulty government survey, and will now forgo expansion of the controversial discretionary labor system in the current Diet session.

The shift is apparently intended to minimize damage ahead of a critical leadership election in September.

After weeks of heated criticism by opposition lawmakers, Abe announced late Wednesday night that he has decided to "completely remove" expansion of the system from his proposed labor reform bill, currently at a draft stage, citing the public misgivings that have been stoked by the ongoing data scandal.