Japanese Prime Minister Naoto Kan said on Friday he has no plan to call a snap election to break a deadlock in parliament, where opposition parties are threatening to block bills for a workable budget in the fiscal year from April.
Kan is under pressure to either resign or call an early poll as his clout in the ruling Democratic Party of Japan (DPJ) weakens and opposition parties refuse to cooperate with him on pushing through budget bills in the divided parliament.
Approval by the opposition-controlled upper house is needed to pass bills needed to make the 2011/12 budget work, including one allowing issuance of deficit-financing bonds and another that would lower the corporate tax rate.
Kan told opposition parties that he would not cave into their demands to call a snap election.
"I'm not thinking at all of dissolving the lower house," Kan told a parliamentary session.
But he added that he will "take action" if he needed to choose among the options available to him under the Constitution, leaving room open to make such a decision in the future.
Analysts speculate Kan could dissolve the lower house and call a snap election, although many DPJ lawmakers are against an early poll since the party would most likely lose a hefty chunk of seats and parliament could well remain divided.
Kan, whose public support ratings have sunk to 20%, also faces growing calls including from within the DPJ to resign.
A ruling party lawmaker with ties to Kan's most influential rival became the first to publicly say that he will stand as leader if the premier steps down, media said on Friday.
"I will run if Prime Minister Kan resigns and there is a party leadership vote," Shinji Tarutoko, the party's former parliamentary affairs chief, was quoted by the Yomiuri newspaper as telling a TV programme recorded on Thursday.
But it is unclear if Kan's resignation would make it any easier for the DPJ to implement policies in parliament. The second-biggest opposition party reportedly rejected a deal proposed by the DPJ last month in which Kan would quit in return for help in securing passage of budget bills.
Failure to pass budget-related bills could cause a shutdown of parts of the government within months, similar to what happened in the United States in the 1990s, and increase the chance of more downgrades of Japan's debt rating.
Kan also has the option of hanging on to his job in hope that opposition parties will become more willing to cooperate with the ruling coalition in parliament after nationwide regional elections in April.