Japan leadership race starts

Mori's government has been hit by scandals

The Liberal Democratic Party in Japan says it will hold an election to replace embattled Prime Minister Yoshiro Mori on 24 April.

The Tokyo stock market has dropped to its lowest level in more than 15 years

Mr Mori announced his intension to resign as party leader and prime minister last month.

The winner will become Japan's 11th prime minister in 12 years.

Mr Mori has been under pressure inside the governing three-party coalition to resign after a series of gaffes and government scandals, as well as a the continuing financial crisis.

LDP elders are keen to get rid of him ahead of key July elections for parliament's Upper House.

Party powerbrokers

No contenders for the post have yet been declared, but domestic media have tipped former Prime Minister Ryutaro Hashimoto - now a minister in Mr Mori's cabinet - as likely to run with the backing of the LDP's biggest faction.

Mr Hashimoto, a past proponent of fiscal reform to get Japan's massive public debt under control, resigned from the top post after the LDP performed abysmally in a 1998 Upper House election.

LDP reformer Junichiro Koizumi: A possible successor to Mori

While 63-year-old Mr Hashimoto said little at the faction's gathering, which was attended by most members of the 100-strong group, he later met with the faction's select few - seen as the real powerbrokers of the party.

Another LDP lawmaker seen as a strong contender, Mr Mori's chief lieutenant and reform-minded Junichiro Koizumi, 59, also did not rule out the possibility of running.

"It's 50-50. I am giving it careful consideration," Jiji news agency quoted him as telling a meeting of his faction.

Loan problems

Former trade minister Mitsuo Horiuchi also told his own faction on Thursday he was ready to run.

Other contenders include party elder Hiromu Nonaka, 75, and Economics Minister Taro Aso, 60, who said on Tuesday he was considering his candidacy in response to calls to run by some young members of the LDP.

The finalising of the LDP election timetable comes as the government scurries to finalise a package of economic steps aimed mainly at solving the bad loan problems at the nation's banks and bolstering the flagging economy.

The measures had been expected to be unveiled on Wednesday, but ruling politicians said the government would delay the announcement until Friday.