TOKYO (Reuters) – Opposition Democratic Party leader Ichiro Ozawa looked set on Tuesday to try to ride out a fundraising scandal that has clouded his party's prospects for an election investors had hoped could break Japan's policy deadlock.

Ozawa, 66, told party executives he wanted to stay in his post, Japanese media reported, despite surveys showing that a majority of voters think he should quit after his aide was arrested last week on suspicion of accepting illegal corporate donations.
Before the scandal broke, a political stalemate and voters' frustrations with Prime Minister Taro Aso had raised the chances Ozawa would lead his party to victory in the election. That would end more than 50 years of nearly unbroken rule by Aso's Liberal Democratic Party. An election must be held by October.
“I want to realize ... a change in politics from (a system) controlled by bureaucrats to politics based on the people,” Kyodo news agency quoted Ozawa as telling the party executives, echoing his signature policy pledge. Ozawa was scheduled to give a regular news conference at 3 p.m. (2 a.m. EDT).
The scandal -- which comes as Japan struggles with a deepening recession and share prices near 26-year-lows -- has cut into support for the Democrats.
Analysts have said the Democratic Party could still win the election, and perhaps even widen its lead, if Ozawa stepped down quickly and was replaced by a new leader with a credible and clean image.
“What is necessary now is for the party to act together,” Democratic Party executive Hajime Ishii told reporters after top officials gathered to discuss fallout from the scandal.
“We are confronting a challenge that shows how difficult it is to achieve a change in administration,” he said he told the meeting. “Let's work together with that understanding.”
The scandal has done little to bolster the unpopular Aso and the LDP Trade Minister Toshihiro Nikai and other ruling party lawmakers also said they had received donations from the construction firm at the heart of the affair.
Nikai, 70, has said his party faction would return funds received from the company, but repeated on Tuesday that he believed there had been no wrongdoing.
“After consulting with those involved and experts, I believe that (the donations) were handled appropriately based on the political funding law,” Nikai told a news conference.
A survey by the mass circulation Yomiuri newspaper published on Monday showed that about 53 percent of voters wanted Ozawa to resign while more than 80 percent were not convinced by his explanations of the affair. Other surveys showed similar results.
The Yomiuri survey also showed that 34 percent planned to vote for the Democrats in the next election, down from 40 percent but still higher than the 24 percent who backed Aso's LDP.
“This was an error by the opposition,” Health Minister Yoichi Masuzoe told a news conference. “There is nothing for us to be happy about.”
Aso's two predecessors quit in the face of a divided parliament where the opposition controls the upper house and can delay legislation, and some in his own party want to pick a new leader before the election.