Japan's Ichiro Ozawa 'won't quit' over funding row

A leading figure in Japan's governing party, Ichiro Ozawa, says he will not resign despite a growing scandal over political funding.

Police have now arrested three aides to Mr Ozawa, Secretary-General of the Democratic Party (DPJ), seen by many as Japan's most influential politician. Mr Ozawa admits misunderstandings over a suspicious land deal but insists he has done nothing wrong. The DPJ came to power in September but has been dogged by corruption claims. Mr Ozawa, who as secretary-general is second in command of the DPJ, lashed out at Tokyo prosecutors after they arrested his third aide on Friday. "I will stay on to fulfil my given duty, and squarely fight against such an exercise of power [by prosecutors]," he said. "Our funds have nothing to do with money that is illegal." Our correspondent in Tokyo, says Mr Ozawa is so powerful in the DPJ that some have called him the "Shadow Shogun". He is credited with engineering last year's election victory which ended half a century of conservative dominance. Since then, the government has leaned heavily on his skills as a combative backroom deal maker, our correspondent says.

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The allegations surround Mr Ozawa's political fundraising organisation and its purchase of a plot of land in the capital Tokyo. Prosecutors are investigating the origin of about 400m yen ($4m; £2.7m) used to buy the land in 2004. Prime Minister Yukio Hatoyama has said he is standing by Mr Ozawa. "Secretary-General Ozawa has said that he has not broken any laws. As the leader of the Democratic Party, I believe in Secretary-General Ozawa," he said. Mr Hatoyama has himself been caught up in an alleged scandal over funding. In December he apologised after two former aides were charged with misreporting millions of dollars of donations. Correspondents say claims of corruption and financial scandal will erode support for the government, which is under huge pressure to rescue Japan's ailing economy. Parliament will convene on Monday to begin debating the largest budget in Japan's history. The country's debt is already the largest in the developed world.