South Korean President's Leadership Under Question Over PM Troubles

(Reuters) - South Korean President Park Geun-hye rejected the resignation of her prime minister on Thursday and asked him to stay on after her second nominee for the job stood aside over controversial comments he had made about Korea's troubled past with Japan.

The decision to keep incumbent Prime Minister Chung Hong-won, who tendered his resignation two months ago over the government's flawed response to a ferry disaster, heightened concerns about her ability to rule and push through reforms.

"The fact that a prime minister who has offered to resign is staying means it's going to be difficult to see her promises get fulfilled," said political commentator Rhee Jong-hoon, who heads iGM Consulting.

Park has suffered a sharp drop in public support since the April 16 ferry tragedy that killed more than 300 people, many of them children on a school trip. The latest polls show a 20-percentage point plunge in her ratings.

Her government has been criticized for slow and incompetent handling of the rescue operation and she has vowed dramatic reform to fix bureaucratic corruption and regulatory oversight that have been cited as causes of the tragedy.

The post of prime minister is largely ceremonial, with power focused on the presidency, but Park's failure to install a convincing candidate cast fresh doubt about her ability to rule Asia's fourth-largest economy and push through tough reforms.

"It's a problem. We keep seeing these stumbles and mishaps," said Daniel Pinkston of the International Crisis Group. "At some point, everywhere, governments have to govern. You have to get policy through."

Park is in the second year of a single five-year term and has a parliamentary majority that can help her push through legislation to implement her reform policies.

However, her ruling Saenuri Party has been reluctant to back nominees who quickly became unpopular.

Park's second nominee for the top cabinet post, former journalist Moon Chang-keuk, withdrew his name on Tuesday amid a public furor over comments he made at a church gathering, where he said it had been God's will for Korea to suffer under Japan's colonial rule in the early 20th century.

Her first nominee, a former Supreme Court justice, quit last month over questions about the ethics of earning a large income soon after leaving public service.

"There is a serious administrative vacuum and division of public opinion as a result of various issues that arose in the confirmation process," said Yoon Doo-hyun, Park's chief secretary for public affairs.

"The president has decided this situation cannot be left to persist and, after deliberations, returned Prime Minister Chung Hong-won's resignation and asked him to continue on with a sense of mission and dedication," Yoon said.