Japan PM and opposition clash on budget

By Chisa Fujioka

TOKYO (Reuters) - Japan's main opposition party threatened to boycott parliament from Tuesday, Kyodo news agency said, after Prime Minister Taro Aso refused to say when he would submit a second extra budget for the recession-hit economy.

Aso told reporters that Democratic Party leader Ichiro Ozawa had urged him to submit a budget to finance a promised government stimulus package with about 5 trillion yen ($51.86 billion) in new spending, including controversial payouts to individuals.

Japan's economy slipped into recession in the third quarter, government data showed on Monday, battered by the global financial crisis.

The Democrats, who with smaller allies control parliament's upper house and can delay bills, are growing frustrated with Aso's seeming reluctance to call a snap election for parliament's lower house that analysts say the ruling bloc could well lose.

Aso and Ozawa met on Monday. The Democrats had said that if the meeting did not take place, they could decide to delay a vote in parliament on a bill to extend Japan's naval refuelling mission in support of U.S.-led operations in Afghanistan.

"I said that we are working on the extra budget now but that I couldn't say clearly when we would submit it. We are making efforts," Aso told reporters after the meeting.

"But this has nothing to do with the refuelling bill or the bill to strengthen financial institutions," he added, referring to another bill to allow injection of public funds into banks.

The refuelling mission in the Indian Ocean was halted for months last year because the opposition-dominated upper house of parliament, many of whose members say it breaches Japan's post-war pacifist constitution, sat on the bill for weeks.