Japan's unpopular Prime Minister Taro Aso faced a show of defiance on Monday at the start of a high-stakes parliament session as a senior lawmaker threatened to leave the ruling party.
Aso, whose support has dwindled to around 20 percent in recent polls, wants the 150-day session to approve a raft of measures to revive the world's flagging number-two economy.
He is proposing 4.79 trillion yen (52 billion dollars) in supplementary funding for the year to March 2009 to cover tax cuts, cash rebates and other incentives, along with a record-high annual budget for fiscal 2009.
"We face a mountain of difficult issues sitting before us. But let us be united and go through the parliament session," Aso told his ministers in the new year's first cabinet meeting.
But hours after Aso's appeal, a senior member of his Liberal Democratic Party (LDP) wrote a letter to the conservative premier threatening to leave unless he called a snap election.
Yoshimi Watanabe, the former minister for administrative reforms, also urged Aso to scrap the plan for 21.7 billion dollars in cash rebates, which he contended was a gimmick that would worsen Japan's debt-ridden finances.
"If my proposals are not swiftly and sincerely reviewed and deliberated, the letter says that I, taking the just path, shall leave the Liberal Democratic Party," Watanabe told reporters.
The LDP has been in power continuously since 1955, except for a period of 10 months in the early 1990s. Japan must hold an election by September.
"Politics nowadays pays too much attention to the interest of the party. I say we must look at things from the eyes of the people," Watanabe said.
Along with Watanabe, several liberal-leaning LDP lawmakers have formed "study groups" widely seen as laying the groundwork for a new party.
Watanabe, 56, whose father was a prominent LDP foreign minister, has pushed Aso to call elections to seek a popular mandate for a party that has switched premiers three times in little over two years.
However, polls have shown the ruling bloc risks suffering a landmark defeat because of Aso's low popularity and public concern over the recession and a widening gap between rich and poor.
Hundreds of people, including homeless laid-off workers, rallied Monday outside of parliament to demand that the government do more to stop companies from axing jobs during the recession.
The main opposition Democratic Party of Japan voiced confidence about upcoming elections as it held its own meeting on ways to protect jobs.
"This year will become a year of historic importance," opposition chief Ichiro Ozawa said.
"With our goal of putting the priority on people's lives, we have to earn public support --- first through snap elections and then through actual policy-making," Ozawa said.
Aso told a news conference Sunday he would not call elections for a few months at least, pledging to tackle the economic crisis first.
Finance Minister Shoichi Nakagawa urged parliament to pass the budget legislation, warning that the economy was set to get worse as demand for Japanese exports slumps and consumer spending fails to pick up.
"The international financial and capital markets have fallen into a crisis that is said to come only once in 100 years, pushing the economy into recession," Nakagawa said.