Island plans by Tokyo's nationalist governor may stoke fresh China tensions

By Antoni Slodkowski and Junko Fujita

TOKYO, Oct 4 (Reuters) - Tokyo Governor Shintaro Ishihara, afiery nationalist whose failed bid to buy a group of disputedislands ignited a crisis with China, is pushing ahead with aplan to build structures there to hammer home Japan's claim,officials involved told Reuters.

Although such a move is not imminent, it would be certain tostrain Japan's already shaky relations with China and couldprompt a rebuke from the Obama administration, which has urgedboth sides to ease tensions by setting aside the dispute.

Ishihara's gambit appears aimed at forcing a new showdown inthe island dispute with China. It is based on the view thatJapan's main opposition -- the conservative Liberal DemocraticParty (LDP) -- is likely to take power in an election in thecoming months and that it would be receptive to his hard-linepolicies, two officials close to Ishihara said.

Akiko Santo, a member of the House of Councillors from theLDP, said Ishihara would try to win support from a newgovernment to use about $19 million he has raised fromcontributors to build some basic infrastructure on the islands.

Ishihara's deputy, Naoki Inose, has confirmed the plan.

They claim that construction of a lighthouse, radiotransmitter or basic harbour facilities would increase safetyfor Japanese fishermen. It was not clear how -- or even whether-- such private funds could be used for construction ongovernment property.

Ishihara set off the slide in Japan-China relations with hisinitial bid to buy the islands, ensuring his next steps in thedispute will be scrutinized.

Narushige Michishita, an associate professor at the NationalGraduate Institute for Policy Studies in Tokyo, said Ishihara'spush could "re-create the situation we have just gone through --strong reaction from China followed by demonstrations andattacks on Japanese companies."

That effort was thwarted when the national government outbidIshihara last month with a taxpayer-funded bid to acquire threeof the isolated islands called the Senkaku in Japan and Diaoyuin China.

Prime Minister Yoshihiko Noda's nationalisation of theislands was intended to keep them from Ishihara and to head offa more damaging confrontation with China.

But the Japanese government's move triggered a wave ofprotests in China that shuttered Japanese factories and stores,disrupted trade and prompted Beijing to strengthen its own claimto the disputed territory.

'SACRED TERRITORY'

China has claimed the islands as its "sacred territory" andsays its claim predates Japan's. Patrol ships from the twocountries have been circling in a standoff in the waters off thedisputed islands, raising concern that a collision or otherincident could escalate into a bigger clash.

Now an independent, Ishihara has been governor of Tokyosince 1999. A former LDP member and author, he is best known forwriting "The Japan that Can Say No," a 1989 book that urgedJapan to step away from reliance on the United States.

The LDP is expected to capitalise on frustration with Noda'sgovernment and his Democratic Party of Japan, which took powerin 2009 but has been criticised for its response to last year'searthquake and nuclear disaster and its economic stewardship.

Last month, former prime minister Shinzo Abe was elected tolead the LDP as the party heads into an election that could becalled before year end. Abe's selection as his chief aide,Shigeru Ishiba, is a defense expert who has argued Japan shouldtake stronger action to protect territory it claims in disputeswith China and South Korea.

Ishihara began raising private contributions from supportersearlier in the year to buy the islands in the East China Sea.

"The funds will be used when something can be done togetherwith the LDP," said Santo, an Ishihara ally who had tried tobroker Tokyo's effort to buy the islands from the family thathas owned them since the late 1970s.

Tokyo vice governor Inose added: "With an Ishiba or Abegovernment we could use the funds we have raised to build somekind of shelter for ships or a transmitter or lighthouse."

Ishihara, 80, had said on Sept. 11 -- the day the nationalgovernment signed a contract to buy the islands -- that theTokyo government could hand over the money it raised "if thenext administration agreed to build a minimum of infrastructure"on the disputed territory.

Inose and Santo indicated those plans were still movingahead even after the wave of costly protests in China and theescalating tension between the two sides over the past month.

Recent opinion polls show the LDP as more popular than thecenter-left DPJ and Abe as having more support than Noda amongJapanese voters. That could create a new opening for Ishihara topush his plans for the disputed islands.

Noda, 55, said last month his priority was to "maintainstable administration" over the islands and questions of anyconstruction on the property should be taken up later.

"We are already maintaining and controlling (the islands) ina calm and stable manner," Japan Foreign Koichiro Gemba said onWednesday when asked about proposals to build on the islands.

By contrast Abe, 58, said during his campaign for LDPleadership that he would consider setting up a shelter forfishing boats and facilities where civil servants can staypermanently to strengthen Japan's control over the islands.

Now that Abe has taken the LDP's helm, his stance onterritorial disputes will be reflected in the party's policy, anLDP official in the party's policy planning wing said.

"I think Abe and Ishiba are of the same mind here (asIshihara)," Santo told Reuters. "Of course, all of this dependson the LDP taking back power in the next election."

($1=78.04 yen)

(Additional reporting by Kiyoshi Takenaka, writing by KevinKrolicki; Editing by Raju Gopalakrishnan)

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Keywords: JAPAN CHINA/ISLANDS