UPDATE 3-Japan sticks to U.S. base deadline as ratings slip

By Isabel Reynolds TOKYO, May 10 (Reuters) - Japan stood by an end-of-May deadline on Monday for resolving a row over a U.S. Marine base, denying an earlier report that it would delay a decision amid falling voter support for the ruling party. Dissatisfaction with Prime Minister Yukio Hatoyama's handling of the dispute has been one of the triggers for evaporating voter support in the run-up to an upper house election expected in July, which his ruling party must win to avoid policy deadlock. Kyodo news agency had said, without citing sources, that the government had given up on Hatoyama's self-imposed deadline on finding a relocation site for the Futenma airbase on Japan's southern Okinawa island. But Hatoyama, under speculation that he may have to resign if he cannot resolve the dispute, said he still hoped for an agreement by the end of the month. He told reporters he was sticking to the promise he had made to all those involved, including Okinawa residents and U.S. officials, to agree to a "direction" on resolving the issue. "We will create an environment in which this agreement can be reached." Hatoyama's top aide, however, said it could be hard to complete a detailed plan by the end of month. "It will be very tough to decide on all the technical issues and other details on what will happen," Chief Cabinet Secretary Hirofumi Hirano told a news conference. "But we need to set a clear direction for our thinking and on other issues, or otherwise we won't be able to say we've resolved this." Disillusioned by funding scandals in the ruling party and Hatoyama's perceived inability to take hard decisions, less than a fifth of Japanese plan to vote for the Democratic Party in the upper house election, a newspaper poll showed on Monday. The Democrats' receding chances of winning a majority in the election have raised the possibility of policy deadlock as the country struggles to maintain a fragile economic recovery and control ballooning public debt. "There is no way to raise support, so the Democrats are going into damage control mode," said Tsuneo Watanabe, senior fellow at thinktank the Tokyo Foundation. That could include blaming Hatoyama personally so as to deflect criticism from the party, he said. About a quarter of respondents to the Yomiuri poll said they supported Hatoyama and his cabinet, down on 33 percent in a poll last month and compared with 67 percent who said they did not. FUZZY DEFINITION About half respondents to the Yomiuri poll said Hatoyama should resign if he misses the end-May deadline. In another worrying sign for Hatoyama, a poll by TV Asahi showed voter support for his ruling Democratic Party had slipped to below that of the main opposition Liberal Democratic Party. The chances of a deal on Futenma had already seemed remote after residents of both Okinawa and the tiny island of Tokunoshima about 150 km (90 miles) away reacted angrily to Hatoyama's suggestion that they share the burden of the airbase. That idea was a modification of a 2006 deal, still favoured by the United States, which would move the Futenma base from a city centre to a remoter part of Okinawa. But Hatoyama raised hopes during last year's election campaign it could be moved off the island altogether. Members of Hatoyama's cabinet have blurred the definition of what he has promised and some analysts say the best that can be expected is for talks to continue with the aim of reaching a deal before President Barack Obama visits in November. Japan and the United States are set to hold the second round of working-level talks on Futenma in Washington on Wednesday. (Additional reporting by Chisa Fujioka) ((isabel.reynolds@thomsonreuters.com; +813-6441-1883; Reuters Messaging isabel.reynolds.reuters.com@reuters.net)) Keywords: JAPAN POLITICS/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.