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Prosecutors to quiz Japan ruling party's Ozawa - media

TOKYO (Reuters) - Prosecutors are seeking to question Japanese ruling party powerbroker Ichiro Ozawa over a funding scandal, media said, a move that could hurt his chances of mounting a challenge to Prime Minister Naoto Kan.

Japan's ruling Democratic Party Secretary-General Ichiro Ozawa attends a news conference at the party headquarters in Tokyo April 27, 2010. REUTERS/Toru Hanai

Media reports have said Ozawa, a veteran campaign strategist, may be preparing a challenge to Kan after the party suffered a stinging defeat in upper house elections this month.

Support for the Democratic Party-led government initially rose after Kan took office in June but then fell after he floated the idea of doubling Japan’s sales tax to 10 percent to curb public debt, which is nearly twice the size of the economy.

The Democrats will hold a leadership vote in September.

Support for Kan’s government has fallen to 31.8 percent, down 9.4 points from June, according to a poll by Jiji news agency published on Friday.

Jiji conducts face-to-face surveys of voters, and its figures tend to be lower than other media polls, which have recently put the government’s approval rate at around 38 percent.

A judicial panel said last week a decision by prosecutors not to charge former Democratic Party secretary-general Ozawa over an alleged false entry in the 2007 financial reports of his funding group was inappropriate.

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The panel asked the prosecutors to investigate further and prosecutors have asked Ozawa to submit voluntarily to questioning, Kyodo news agency reported.

Ozawa has denied any intentional wrongdoing.

Judicial panels of ordinary citizens review cases where a complaint has been made about prosecutors’ failure to indict a suspect.

Another judicial review panel is expected to make a decision in the next few months for the second time on whether prosecutors should charge Ozawa regarding his group’s financial statements for 2004 and 2005.

If it decides that Ozawa must face charges it will force the courts to appoint lawyers to prosecute the case.

Reporting by Kiyoshi Takenaka and Yoko Kubota; Editing by Edwina Gibbs