Taro Aso's party has governed for most of the past half century
Japan's embattled prime minister, Taro Aso, is to call an election for 30 August, officials from his party say.
He made the decision after a crushing defeat in local elections in the capital, Tokyo, seen as a key indicator for a national vote.
Mr Aso's ruling Liberal Democratic Party (LDP) has ruled Japan almost continuously for the past 50 years.
His popularity has plummeted as Japan's economy, the world's second-largest, has suffered in the global downturn.
''I want to seek the people's mandate by dissolving the House of Representatives early in the week beginning 21 July. Election Day is 30 August,'' Prime Minister Aso was quoted as saying in a meeting with cabinet ministers and officials from the LDP and its coalition partner, New Komeito.
Mr Aso also apologised in the meeting for the LDP's poor showing in the Tokyo municipal assembly election, Deputy Chief Cabinet Secretary Jun Matsumoto said.
The opposition Democratic Party (DPJ) won 54 seats to 38 for the LDP, ending four decades of LDP dominance in the assembly.
Japan is gripped by a steep recession and the prime minister's gaffes and apparent indecision have left him with an approval rating of about 20%, says the BBC's Roland Buerk in Tokyo.
Mr Aso has also been facing open rebellion within his own party.
Pressure to quit
Meanwhile, the DPJ introduced a no-confidence motion against the prime minister and his cabinet in the lower house and a censure motion against the prime minister in the upper house.
The no-confidence motion is unlikely to be passed as the LDP-New Komeito coalition holds a majority in the more powerful lower house.
ASO'S KEY MOMENTS
Sept 2008: Confirmed as PM
Nov 2008: Causes outrage by saying doctors lack common sense
Nov 2008: Alienates pensioners - a key constituency - by saying they "just eat and drink and make no effort"
Feb 2009: Economics minister says Japan facing worst economic crisis since WWII
April 2009: Introduces stimulus package after months of delay
July 2009: Tokyo election loss - fourth in recent weeks. DPJ has at least 12 percentage point lead in opinion polls
The censure motion could be adopted in the upper house, which the DPJ dominates.
''The people are suffering under politics ruled by the survival of the fittest,'' said DPJ leader Yukio Hatoyama.
''The only course of action for the prime minister is to dissolve the House of Representatives and ask the people for their verdict.''
Mr Aso has already been widely expected to dissolve parliament after the Tokyo election defeat on Sunday.
He could also now come under increasing pressure to quit as LDP leader before the national poll.
Many in Mr Aso's party fear that calling a snap election would be political suicide, says the BBC's Roland Buerk in Tokyo.
They would prefer he resigned and a new leader be chosen before the country went to the polls.
Mr Aso's LDP party has governed Japan for the past half-century, except for a break of less than a year in the 1990s.
The DPJ has promised that, if it comes to power, it will try to break bureaucracy's grip on policy-making, and increase social welfare measures.
Its support, however, has been eroded by fundraising scandals - Mr Hatoyama recently had to apologise after it emerged that the names of dead people were included on lists of party donors.