Mon May 10, 2010 6:15am EDT
Isabel Reynolds, TOKYO
TOKYO (Reuters) - A top aide to Japanese Prime Minister Yukio Hatoyama denied a report on Monday that the government had dropped an end-of-May deadline for resolving a row over a U.S. Marine base, though there was still no solution in sight.
Kyodo news agency had said, without citing sources, that the government had given up on Hatoyama's self-imposed deadline in the belief that it would be difficult to get the agreement of local people by then.
"The prime minister is saying he will resolve the issue by the end of May, that he will do his best for that," Chief Cabinet Secretary Hirofumi Hirano told a news conference.
But he said it would be hard to complete a plan by then.
"It will be very tough to decide on all the technical issues and other details on what will happen," Hirano said. "But we need to set a clear direction for our thinking and on other issues, or otherwise we won't be able to say we've resolved this."
Hatoyama said before a meeting with cabinet ministers on the row that he would stick to the deadline, but left unclear what form the resolution would take.
Dissatisfaction with his handling of the dispute has been one of the triggers for evaporating voter support in the run-up to an upper house election expected in July.
The Democrats' chances of winning a majority in that election are receding, raising the possibility of policy deadlock as the country struggles to maintain a fragile economic recovery and control ballooning public debt.
Disillusioned by funding scandals in the ruling party and Hatoyama's perceived inability to take hard decisions, less than a fifth of Japanese plan to vote for the Democratic Party in the election, a newspaper poll showed on Monday.
"There is no way to raise support, so the Democrats are going into damage control mode," said Tsuneo Watanabe, senior fellow at thinktank the Tokyo Foundation.
That could include blaming Hatoyama personally so as to deflect criticism from the party, he said.
About a quarter of respondents to the Yomiuri poll said they supported Hatoyama and his cabinet, down on 33 percent in a poll last month and compared with 67 percent who said they did not.
FUZZY DEFINITION
About half respondents to the Yomiuri poll said Hatoyama should resign if he misses the deadline.
The chances of a deal had already seemed remote after residents of both the southern island of Okinawa and the tiny island of Tokunoshima about 150 km (90 miles) away reacted angrily to Hatoyama's suggestion that they share the burden of Futenma airbase.
That idea was a modification of a 2006 deal, still favored by the United States, which would move the Futenma base from a city center to a more remote part of Okinawa.
But Hatoyama raised hopes during last year's election campaign it could be moved off the island.
Members of Hatoyama's cabinet have blurred the definition of what he has promised and some analysts say the best that can be expected is for talks to continue with the aim of reaching a deal before President Barack Obama visits in November.
Japan and the United States are set to hold the second round of working-level talks on Futenma in Washington on Wednesday.
The row has hit the Democratic Party, whose support had already been weakened by a series of funding scandals involving party lawmakers.
The scandals hit the headlines again last month when a judicial review panel said Democratic Party kingpin Ichiro Ozawa, seen by many as the real power behind the government, should be charged over misreporting of his political funds. Ozawa has repeatedly said he will not step down.
(Additional reporting by Chisa Fujioka; Editing by Jeremy Laurence)
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