Japanese Prime Minister Fumio Kishida said Thursday that he decided to step down as chief of his faction in the ruling Liberal Democratic Party, with its political funds scandal taking a further toll on his already flagging government.

The LDP has recently faced criticism amid allegations that five factions, including Kishida's, underreported their revenue from political fundraising parties, from which the extra income may have been returned to some lawmakers as kickbacks.

While Kishida's predecessors typically resigned as leaders of their factions during their terms as prime minister to avoid the appearance of patronage-driven politics, he retained the position since assuming office in October 2021.

Kishida, who heads the fourth-largest faction within the LDP, told reporters, "I will take the lead in the party's political responsibilities and efforts to restore public trust."

He added he will depart from his faction while he serves as premier, with sources close to him saying the group's leadership position will be vacant for the time being.

LDP factions have typically supplied their members with election funding and recommended them for ministerial posts. Around 80 percent of more than 370 LDP lawmakers have belonged to one of the intraparty groups.

But critics have long pointed out that such functions of the factions have provided many LDP lawmakers with opportunities to generate secret funds, as it is difficult to trace how exactly they receive money from their groups and how they use it.

In the wake of the latest allegations, which the Tokyo District Public Prosecutors Office's special investigation squad is investigating, Kishida instructed LDP executives on Wednesday to refrain from hosting fundraising parties.

But there were increasing calls for him to leave his faction to regain public trust in the ruling party.

As the Cabinet's approval ratings have fallen to their lowest levels since Kishida became prime minister, he was also forced this week to deny links to the controversial Unification Church after a Japanese daily reported he had met with senior figures of the organization in 2019.

The Asahi Shimbun reported earlier Thursday that former U.S. House of Representatives Speaker Newt Gingrich acknowledged the presence of individuals related to the Unification Church at their meeting with Kishida.

Later in the day, Kishida once again dismissed speculation about his ties with the religious group, which has faced questions over its aggressive fundraising tactics and cozy ties with ruling party lawmakers.

He said that even if such people participated in the gathering, his viewpoint remains unchanged that he was not aware of who Gingrich's companions were. Kishida added he has been attempting to make contact with Gingrich to confirm the details.

Regarding the political funds scandal, LDP factions have traditionally set their lawmakers quotas for party tickets, usually priced at 20,000 yen ($136), investigative sources said, adding if they surpass their targets, the extra income is returned as kickbacks in some intraparty groups.

The biggest faction, formerly led by slain Prime Minister Shinzo Abe and now chaired by House of Representatives member Ryu Shionoya, is suspected to have pooled secret funds amounting to over 100 million yen.

The prosecutors are considering questioning lawmakers of the faction called Seiwaken, or the Seiwa policy study group, who are alleged to have accepted large sums in kickbacks, once the current parliamentary session ends next Wednesday, according to the sources.

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Japan PM Kishida urges his party factions to forgo fundraisers amid scandal