Japanese Prime Minister Fumio Kishida on Thursday replaced all four ministers belonging to the ruling Liberal Democratic Party's most powerful faction as he makes a desperate bid to fend off criticism of his government's handling of a political fundraising scandal amid slumping public support.

Of the four, former Foreign Minister Yoshimasa Hayashi replaced Hirokazu Matsuno as chief Cabinet secretary, with the prime minister moving to install lawmakers with ministerial experience in his Cabinet. But the expulsion of all members belonging to the largest faction is set to create tensions within the LDP as the group has supported his administration, political pundits said.

The LDP has faced criticism amid allegations that the faction, formerly led by slain Prime Minister Shinzo Abe, failed to declare hundreds of millions of yen of fundraising party revenue in political funding reports in an apparent attempt to create secret slush funds.

Chief Cabinet Secretary Hirokazu Matsuno (C) arrives at the prime minister's office in Tokyo on Dec. 14, 2023. (Kyodo)

The mass resignations leave the LDP in the very unusual situation of having no representatives from the party's biggest faction within the Cabinet.

Kishida told reporters later Thursday that Japan is at a "crucial juncture" in terms of foreign affairs and the economy.

"Under such circumstances, I changed the personnel by selecting work-ready individuals with strong negotiation skills, execution capabilities and the ability to offer effective answers" to questions from opposition parties in parliament.

Hayashi, a member of the fourth largest faction within the LDP, said at his first press conference as chief Cabinet secretary, "I was asked by the prime minister to make every effort to restore the public's trust" as the government spokesman, adding he has never tried to pool secret slush funds.

Economy minister Yasutoshi Nishimura, farm minister Ichiro Miyashita and internal affairs minister Junji Suzuki also stepped down.

Former Justice Minister Ken Saito was tapped as economy minister, and Tetsushi Sakamoto, the former minister in charge of regional revitalization, was named as farm minister, while Takeaki Matsumoto was reinstated as internal affairs minister after losing the role in the last Cabinet reshuffle.

(Clockwise from top L) Hirokazu Matsuno, Yasutoshi Nishimura, Junji Suzuki, Koichi Hagiuda and Ichiro Miyashita. (Kyodo) 

In addition, five senior vice ministers and a parliamentary vice minister belonging to Abe's group gave up their posts in Kishida's government, which has seen its approval ratings plummet to the lowest since he took office in October 2021.

Matsuno, who served as the secretary general of the biggest faction for two years through 2021, is suspected of failing to report more than 10 million yen ($70,000) in income earned from the group's fundraising events, investigative sources said.

Nishimura succeeded Matsuno as secretary general, a position widely viewed as having knowledge of the flow of money, and the incumbent is LDP Diet affairs chief Tsuyoshi Takagi.

In the LDP, Takagi, policy chief Koichi Hagiuda and Hiroshige Seko, secretary general of the party in the House of Councillors, key members of Abe's faction, also tendered their resignations, as they are accused of being involved in similar scandals.

Takagi is likely to be replaced by former Defense Minister Yasukazu Hamada. Hagiuda is expected to remain in the current post until an initial draft budget for the fiscal year from April 2024 is determined on Dec. 22.

The political funds scandal emerged following a criminal complaint alleging five LDP factions, including Kishida's group, underreported revenue from political fundraising parties.

Japan's four newly appointed Cabinet ministers -- economic minister Ken Saito (far L), internal affairs minister Takeaki Matsumoto (2nd from L), Chief Cabinet Secretary Yoshimasa Hayashi (2nd from R) and farm minister Tetsushi Sakamoto (far R) pose for a photo at the premier's office in Tokyo on Dec. 14, 2023, together with Prime Minister Fumio Kishida (C) after attending an attestation ceremony with Emperor Naruhito at the Imperial Palace. (Kyodo) ==Kyodo

LDP factions have traditionally set quotas for lawmakers on the sale of party tickets, usually priced at 20,000 yen. In some groups, if they surpass their targets, the extra funds are passed back to them as a type of commission.

Prosecutors are looking into a possible violation of the political funds control law as Abe's faction allegedly reimbursed members with part of party revenue from ticket sales amounting to around 500 million yen over a five-year period through 2022, the investigative sources said.

The prosecutors are considering questioning the lawmakers as the extraordinary parliamentary session ended on Wednesday, the sources said. Abe headed the faction until he was assassinated during an election campaign speech in July 2022.

In announcing his resignation at his last regular press conference, former top government spokesman Matsuno said he will scrutinize his own political organization and fulfill his accountability "at an appropriate time."

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