In Japan, It’s Showdown Time on Reform : Government: Premier Hosokawa will try to work out an 11th-hour compromise with the opposition. Failing that, he may step aside.

Declaring that he has no intention of clinging to power, Japanese Prime Minister Morihiro Hosokawa today prepared for a final showdown with legislators over enactment of promised political reforms.

Coalition leaders announced late Thursday that Hosokawa will try to work out an eleventh-hour compromise with the president of the opposition Liberal Democratic Party, Yohei Kono. But if Kono rejects a meeting or fails to agree to a new reform plan, they said, Hosokawa will put his coalition’s package to a final vote in the lower house of Parliament.

A two-thirds vote there--considered highly unlikely--would be needed to overturn the upper house rejection of the bills last week. The lower house approved the bills last Nov. 18 but with the support of only 53% of its members.

“If I cannot deliver on my promise of political reform,” Hosokawa said Thursday, “I have no intention whatsoever of clinging to the prime minister’s post.”

When Hosokawa took office last August, he promised to “assume responsibility” if he failed to enact the reforms.

Hosokawa made his announcement at a political rally in a hotel, where he took the unusual step of urging voters to “call your representatives” to appeal for support of the bills, which would change the way the powerful lower house of Parliament is elected and would ban corporate donations to individual politicians.

“After five years of repeatedly debating political reform, if we now bury it because of only minor differences of opinion, the opportunity to carry out reform will never again come,” Hosokawa warned. Although both sides agreed to scrap the system of multi-seat constituencies in favor of single-seat districts, they remained deadlocked over the extent to which controls should be tightened on political funds.

“Without political reform, we cannot hope that economic stimulus measures could succeed,” Hosokawa told the rally. “Without political reform, it will be impossible to realize administrative or (budgetary) reform, or reform and opening of our economy and society.

“The people’s loss of confidence in party and parliamentary politics will become decisive, and it is perfectly clear that Japan will lose completely the trust of the international community,” he added.

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His remarks about not clinging to his post echoed comments made Tuesday by Shusei Tanaka, his chief personal adviser, who predicted that the prime minister’s resignation over failure of the bills is “highly possible.”

If he does resign, he will become the third prime minister in three years to do so after failing to change Japan’s scandal-ridden political system.

Shortly before midnight, a joint committee of the upper and lower houses gave up efforts to hammer out a compromise reform package.

Hosokawa’s coalition of seven lower house parties holds only 260 seats in the 511-member chamber and would need a rebellion by 81 Liberal Democrats to win the necessary two-thirds approval. Even if the bills fail, the vote could precipitate another major split in the Liberal Democratic Party, which lost its 38-year grasp on power after about 50 reformers bolted the party last summer.

Although a new parliamentary session will begin Monday, the bills cannot be carried over--and speculation is rampant about what Hosokawa might do if defeated.

He could do nothing, or resign without calling a general election. He could call a general election in February. Or he could postpone a resignation and general election until after he announces a package of measures to stimulate Japan’s limp economy.

The economic measures have been shunted aside for more than a month by the political turmoil. Also up in the air is a scheduled summit meeting between Hosokawa and President Clinton at the White House on Feb. 11.

And another political upheaval is rearing its head: Police and prosecutors have leaked to Japanese reporters plans to arrest Parliament members for taking bribes from construction companies in a scandal that already has snared more than 30 governors, mayors and construction company executives.