TOKYO: Japanese political veteran Ichiro Ozawa and dozens of other lawmakers who quit the ruling party over a tax hike plan launched a new party on Wednesday in a bid to challenge the government, possibly heralding an era of political shake-up.

The exit of the 70-year old Ozawa, whose clout is waning after four decades of political wheeling and dealing, will make it easier for Prime Minister Yoshihiko Noda to control his Democratic Party of Japan (DPJ) and forge coherent policies.

But Noda, who depends on support from opposition parties to pass laws in a split parliament, becomes more vulnerable to an early election if further defections shrink his party's already slim majority.

The next lower house election must be held by September 2013 and the possible proliferation of smaller parties will also make coalition politics a necessity.

“Ozawa's departure is a plus for Noda in terms of his policy management because it removes sources of friction and makes it easy to cooperate with main opposition parties,” said Atsuo Ito, an independent political analyst who has worked for both the Democrats and rival Liberal Democratic Party (LDP).

“But in terms of numbers, Noda's government is weakening.”

Opinion polls suggest no single party will win a majority in the next election, underlining voters' disgust at the inability of mainstream parties to tackle persistent problems such social and economic effects of a shrinking, ageing population.

“If an election is called, it may spur a political realignment. Neither the Democrats nor the main opposition could win a majority. It would be a matter of who is allying with whom,” said a lawmaker close to Noda.

The defection of Ozawa and his followers cuts the DPJ's seats in the lower house to 250, allowing the party to keep its majority by just 11 seats.—Reuters