Japanese take their revenge for PM's insults

Residents of Tokyo famously live in the planet's most seismically unpredictable capital, yet they could always boast that they enjoyed one of its most stable political systems – until now. Voters in the city's municipal elections have just triggered the first rumblings of what could be a national political earthquake, by handing a historic drubbing to the ruling Liberal Democratic Party of Japan (LDP).

The opposition Democrats ended 40 years of Liberal Democrat dominance in the metropolis, winning 16 more seats in local elections at the weekend. They also effectively torpedoed the career of the nation's Prime Minister, Taro Aso, who is now, politically, a dead man walking. The defeat prompted Mr Aso to call a general election in August, which on current form will see his party lose its almost unbroken, half-century grip on power over the world's second-largest economy. No one knows what impact that will have on Japan's relations with the rest of the world, but the guessing has begun.

Mr Aso is the latest in a string of dud leaders to test the patience of Japan's long-suffering voters. He has been in power just 10 months and is the fourth prime minister since 2005. Two of his predecessors, Shinzo Abe and Yasuo Fukuda, also quit amid controversy and dismal poll ratings.

Mr Aso has distinguished himself only by making some of the worst foot-in-mouth gaffes in Japanese politics. In a country with the world's highest percentage of pensioners, he frequently insulted the elderly, with predictable results on his popularity. Last year, he questioned the wisdom of stumping up for healthcare for senior citizens. "Why should I pay tax for people who just sit around and do nothing but eat and lounge about drinking," he moaned.

In truth, Mr Aso's verbal carpet-bombs have left few untouched. The old, ethnic minorities, the overweight, the homeless, his political opponents and doctors have all been scorched beneath his undercarriage. His occasional attempts at a surgical strike, such as when he likened the Democrats to the Nazi Party last year, have invariably blown up in his face.

Mr Aso's big mouth only partly explains his party's fall from grace. Like his predecessors, he has been unable to tackle Japan's daunting structural problems. The country is snared in its worst economic crisis since the Second World War. At the end of 2008, it suffered the biggest quarterly contraction in 35 years, shrinking twice as fast as the eurozone and more than three times as fast as the US. An ageing population and a mountain of public debt – equivalent to 180 per cent of the country's gross domestic product – have added to what one commentator recently called "the stench of decay".

The LDP is powerless to stop this decline. Its factions are deeply split, and national policy under the party is a witches' brew of competing interests that has left the country rudderless and drifting. Its addiction to spending on public works – 700 trillion yen (about £4.7trn) has been budgeted for roads and railways over the next 10 years – is widely viewed as catastrophically wasteful.

Voters might have given Mr Aso the benefit of the doubt, had he demonstrated leadership and humility in the face of crisis, but he has shown neither. By turns petulant and defensive, he has been an inept communicator, luxuriating in a bon vivant lifestyle that mocked the growing hardship around him. As the recession began to bite early in his term of office, the press revealed that he spent almost every night of the working week at expensive hotels and restaurants. Official records published in one magazine showed he ran up a food and drink bill of well over £340,000 between 2005 and 2007, including £65,000 at his favourite bar.

Ironically, he was chosen from within the LDP last autumn because of his popularity with the electorate, and his impeccable political pedigree – he is the grandson of the post-war premier Shigero Yoshida and is related by marriage to the current Japanese Emperor, Akihito.

What comes after Mr Aso is likely to be a great political drama. The Democrats have promised a war on wasteful bureaucracy and plan to redirect about 10 per cent of the national budget toward building what they call a social safety net, offering more help for the old, the poor and the childless, as well as a £155-a-month children's allowance aimed at boosting the plummeting birthrate.

In addition, the Democrats have hinted at scaling back Japan's military alliance with the US. Party elders such as Ichiro Ozawa have blocked Japanese support for the US-led war in Afghanistan, arguing that Japan's policy was a sign of cravenness towards America. "The alliance means an equal relationship. If it is just following what the US says, it is not an alliance," Mr Ozawa declared.

Mr Aso has vowed to dissolve the lower house of parliament by 21 July and to bring his party back from the brink, but he may not even last until election day on 30 August. In addition to the growing movement against him within his own party, the opposition joined forces yesterday to table a no-confidence motion in his leadership.