Naoto Kan becomes Japan's new prime minister

Naoto Kan, a co-founder of Japan's Democratic Party today became the new prime minister of the world's second largest economy and vowed to rid the country's political environment of "money scandals".

Kan, 63, who was deputy prime minister and finance minister, was picked up to head the ruling party to succeed Yukio Hatoyama who bowed out of office over his bungled handling of a dispute over a major US base in the country.

Kan was formally endorsed as new prime minister by the country's Parliament, after he emerged as a new head of the ruling party defeating his little known rival Shinji Tarutoko, by a vote of 291-129, Kyodo news agency reported.

The new prime minister in his first utterance after election as new party head said he would aim to create a political environment free from money scandals, an indication that he would distance himself from the ruling party's scandal-tainted kingpin Ichiro Ozawa.

In a blistering attack on Ozawa, Kan told the party strongman that he should "stay quiet for at least a while, for the sake of the nation".

Advising Ozawa to come clean, the prime minister said the party kingpin should take responsibility for causing public distrust due to fundraising scandal.

In a statement released after his victory, the prime minister while emphasising Japan's alliance with the US, said that he would make continued efforts to reduced the US military presence on the Okinawa base.

But he maintained that Tokyo-Washington alliance would continue to remain a "linchpin of Japan's foreign policy".

Kan, the son of a factory manager, is likely to retain most of Hatoyama's ministers, including foreign minister Katsuya Okada, a potential rival, who in the end backed him.    

The new prime minister takes over the reins of the world's second largest economy at a time Japan is recording slowest growth in Asia and is threatened to be overtaken by China.