Japan PM resigns after US base row

Japan's centre-left Prime Minister Yukio Hatoyama tearfully resigned today, just nine months after a stunning election win, his brief reign derailed by a row over an unpopular US airbase.

Hatoyama ended more than half a century of conservative rule in an electoral earthquake last August, but soon earned a reputation for crippling indecision at the helm of the world's second-biggest economy.

The 63-year-old millionaire, the scion of an influential family dubbed "Japan's Kennedys", quit at a meeting of his Democratic Party of Japan (DPJ), blaming the base dispute and political funding scandals.

"I will step down," an emotional Hatoyama told party lawmakers at a special meeting in parliament, while also vowing to "create a new DPJ".

"I apologise to all of you lawmakers here for causing enormous trouble."

Finance Minister Naoto Kan, 63, who is a deputy prime minister, was widely tipped to succeed Hatoyama and in the afternoon declared his intention to take over the party leadership in a vote Friday.

Kan, a former grassroots civic activist, achieved popularity in the mid-1990s when as health minister he admitted government culpability in a scandal over HIV-tainted blood products.

The new DPJ chief must be elected as prime minister by parliament in a vote expected later Friday. On Monday the new premier is expected to give a policy address and formally launch his new cabinet, said the DPJ.

Speculation had swirled for days that Hatoyama would quit as his approval ratings, once above 70 per cent, crashed below the 20-per cent mark.

The premier's rapid demise since he took office in mid-September was driven by the festering dispute over a US Marine Corps airbase on Okinawa island that badly strained ties with the United States, Tokyo's bedrock ally.

Hatoyama, a Stanford-trained engineering scholar, took power vowing less subservient ties with Washington and closer engagement with Asia, worrying many Japan watchers in the US.

He promised to move the US base off Okinawa, to ease the burden for locals who have long complained of aircraft noise, pollution and crime associated with a heavy American military presence since World War II.

But, after failing to find an alternative location for the base in Japan, the premier backtracked and decided to keep it on the island, enraging Okinawans and his pacifist coalition partners the Social Democrats.

The Left-leaning group quit his three-party coalition on Sunday, weakening the government in the Parliament's upper house ahead of elections for the chamber expected on July 11, in which the DPJ expects to take a beating.