TOKYO (AFP) -- Japan's main opposition party chose one of two veterans as its new president Friday after an embarrassing scandal under an inexperienced leader set back its hopes of creating a true two-party system.

Conservative powerbroker Ichiro Ozawa, 63, faced off against former civil rights activist Naoto Kan, 59, as the opposition stalwarts seek to prove the relevance of the Democratic Party of Japan (DPJ).

The winner will replace 43-year-old Seiji Maehara, a conservative who took the helm only in September after the previous DPJ leader was crushed in general elections due to the huge popularity of Prime Minister Junichiro Koizumi.

Maehara stepped aside after the DPJ falsely but very publicly accused the son of a top Koizumi aide of accepting secret cash from arrested IT tycoon Takafumi Horie.

The failed attempt to discredit Koizumi's Liberal Democratic Party (LDP) sent voter confidence in the DPJ to a record low, letting the ruling party breathe easy despite a series of scandals.

The new DPJ president will serve out the rest of Maehara's term until September, when the LDP will also choose a successor for the retiring Koizumi.

"The new leader of the DPJ must rebuild the party quickly. Otherwise parliamentary politics will continue to be stagnant," said Jin Igarashi, a professor at the Ohara Institute for Social Research at Hosei University in Tokyo.

"The scandal reflected the immaturity of the DPJ. The first and foremost issue for the new leader is to be a magnetizing force for party members," he said.

The DPJ has struggled to find its footing since it was set up in 1998 by former socialists and conservatives disgruntled with the LDP, which has ruled Japan for all but 10 months since 1955. "Reshaping the DPJ so it can be part of a two-party system," the liberal Asahi Shimbun wrote in an editorial Thursday, "is significant not just for the DPJ but also for Japanese democracy."

A former LDP powerbroker, Ozawa bolted the party after losing a factional pa stance widely backed by much of the current LDP.

Ozawa has switched allegiance back and forth for the past decade and languished in the political wilderness until 2003 when his tiny Liberal Party merged with the Democratic Party of Japan under Kan.

Ozawa is known as a shrewd strategist but has alienated some elements with the DPJ through his high-handed approach.

Kan, a 1960s street activist who has led the DPJ twice before, is best known for exposing a scandal in which hospitals distributed HIV-contaminated blood.

Ozawa said that he and Kan, despite their ideological gap, should try to complement each other.

"Our joint responsibility is to make the DPJ a party that can take the government," Ozawa said on a television talk show Thursday.

Analysts and polls indicated Ozawa was a more likely choice, as he has enjoyed support among young lawmakers and former socialists despite his conservative leanings.

"It is possible that Mr. Ozawa would take the helm for now to rebuild the party and pass on the responsibility to Mr. Kan in September to prepare the party for the upper house election next year," Igarashi said.