Friday, July 24, 1998 Published at 05:25 GMT 06:25 UK
Japan's leadership ballot gets underway
All three prime minister candidates vow to rescue Japan's economy
He resigned to take responsibility for the party's disastrous showing in July 12 elections for the upper house of Parliament.
The three candidates, making their final public speeches on national television, all vowed to pull Japan out of its economic difficulties.
They demurred from saying how many votes each had secured so far. "It's a corporate secret," said Seiroku Kajiyama, one of the candidates.
According to Japan's Kyodo News Service, some young LDP members from the Lower House are worried about the party's poor showing in the Upper House. Around 20 members have proposed leaving the party if Mr Obuchi, the party stalwart candidate, is chosen as its leader.
If no one wins a majority in the first ballot, a second ballot will be held immediately between the top two candidates.
Mr Obuchi said on Thursday it would not be easy to solve the country's bad loan problem - Japan's banks are saddled with huge unrecoverable loans
"The first priority is resolving the bad loans. But the problem is that there may not be enough to ensure the economy will pick up," Mr Obuchi said.
Because of his age, he acknowledged that he could die at any time, but wants to spend his last years in service to the country.
"I may stumble along the way but I will devote my life to economic recovery," Mr Kajiyama said.
In his speech, he said the party had to consider why it had done so badly in the upper house election
He said politicians should listen to the voters and think about the long-term future.
"We have to restore the trust of the people in politics," Mr Koizumi said.
"Before we ask people to endure any hardships we have to show that the government and politicians can endure painful reforms themselves."