Leaders of the governing Liberal Democratic Party have agreed that Prime Minister Toshiki Kaifu should stay in office and form a new Cabinet. Because of his weak power base in the party, Kaifu's position had been considered uncertain despite an election victory Sunday that gave the Liberal Democrats a comfortable majority in the powerful lower house of parliament.
Kaifu had said he would resign if the party, which has governed Japan since its formation in 1955, lost its majority.
Doubt was cast on the party's chances by a widespread influence-buying scandal and an unpopular sales tax, but it won 275 of the 512 seats in the lower house, which chooses the prime minister.
If 14 conservative independents join them as expected, the Liberal Democrats will not be far short of their 295 seats in the outgoing house.
The leading opposition Japan Socialist Party won 136 seats, up from 83. The party is expected to vote for a leader soon and Takako Doi, the chairwoman who led the Socialists in Sunday's election, is expected to win.
Japan National Broadcast Corp. said a Socialist election would be held March 25-26 and no one would challenge Doi.
A vote for the Socialists was widely viewed as a protest of the new 3 percent sales tax and scandals in the ruling party. The Socialists entered only 149 candidates and could not have won a majority.
Doi attributed the outcome to the powerful political machines of Liberal Democrats and support from big business.
Sunday's results illustrated the tendency of Japanese voters to forgive indiscretions of the ruling party eventually, which has helped the Liberal Democrats weather several scandals.
Voters registered their dissatisfaction over the latest one, which involved insider stock deals and large political contributions by the Recruit Co. information conglomerate, by depriving the party of its majority in the less powerful upper house in July 1989.
Most senior Liberal Democrats tied to the scandal were re-elected Sunday, including former Prime Ministers Yasuhiro Nakasone, 72, and Noboru Takeshita, 65, and some former Cabinet ministers. Nakasone ran as an independent.
Dozens of influential business and political figures resigned because of the scandal.
Popularity ratings had plummeted when Kaifu, 59, became prime minister in August. He was untainted by the Recruit affair and helped clean up the party image by promising reforms.
Kaifu also has promised to ease the sales tax on food and some other basic items.