Japan's finance minister became the first to launch a bid to lead the country on Thursday as the ruling party scrambled to avoid a policy vacuum after Prime Minister Shinzo Abe's shock resignation.

Liberal Democratic Party (LDP) lawmakers decided to hold an election for party president -- and hence prime minister -- on September 23, rejecting a proposal for September 19 to give candidates more time to make policy pitches to the public.

Finance Minister Fukushiro Nukaga, 63, quickly threw his hat in the ring, but attention was also focused on expected candidacies by hawkish LDP Secretary-General Taro Aso, 66, and rival Yasuo Fukuda, 71, a former chief cabinet secretary known for advocating good ties with Asian neighbors including China.

A former defense and economics minister, Nukaga has twice had to step down over scandals but was one of several veterans tapped by Abe for a revamped cabinet just last month.

"I think it is a politician's responsibility and duty to face this difficult time with determination," Nukaga told reporters.

Abe's year in power has been marked by scandals involving cabinet members and a disastrous election defeat in July.

The conservative leader's decision to step down now sparked criticism and concern that the ensuing confusion could stall vital decisions on policies such as tax and fiscal reform.

Abe had said he was quitting over a stalemate in parliament but officials said health problems were also a factor, and he was admitted to hospital on Thursday for a gastrointestinal disorder worsened by stress and exhaustion. His doctors said he would likely be hospitalized for three or four days.

DEADLOCK STILL LOOMS

Whoever succeeds Abe still faces a deadlock in parliament.

"It is questionable whether just replacing the prime minister will break through the political confusion," the Nikkei business daily said in an editorial.

"No matter who is the next prime minister, managing the administration will be extremely tough."

The main opposition Democratic Party, which with small allies won control of the upper house in the July election, can delay legislation, including a bill to extend a Japanese naval mission in support of U.S. military operations in Afghanistan.

A law mandating the mission expires on November 1.

Other diplomacy could also be affected. Abe, an advocate of a bolder foreign policy who thawed chilly ties with Beijing, had been expected to visit China this year to keep up that momentum.

Aso had been viewed as having the edge in the leadership race, but his closeness to Abe and a record of gaffes raised doubts as to whether his victory is assured, analysts said.

Some media said support in the LDP for Fukuda was spreading, although he told reporters he had not made a final decision on whether to run.

Other names floated include former finance minister Sadakazu Tanigaki and party veteran Taku Yamasaki.

Abe's maverick predecessor Junichiro Koizumi flatly rejected a request to run again, a party lawmaker said.

The new leader is likely to head the LDP going into the next general election for parliament's lower house.

No poll for the lower house need be held until 2009, but some analysts say deadlock in parliament resulting from the opposition's grip on the upper house could trigger one sooner.

While the opposition has control of the upper house, the LDP and its junior partner have a large majority in the lower house, which picks the prime minister.

"Whoever becomes the next prime minister, he should be temporary and the public's confidence should be gauged with ... a general election," Yukio Hatoyama, the Democrats' number two executive, told reporters.

Abe, at 52 Japan's youngest prime minister since World War Two, took office last September with approval ratings of around 60 percent, but his support has dwindled due to lost pension records and a series of scandals that cost him five cabinet ministers, including one who committed suicide.

(Additional reporting by Chisa Fujioka, Isabel Reynolds, Sumio Ito, George Nishiyama and Teruaki Ueno)

Japan Afghanistan China