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FILE PHOTO: Japan's Prime Minister Shinzo Abe, leader of the Liberal Democratic Party (LDP), smiles as he puts a rosette on the name of a candidate who is expected to win the lower house election, at the LDP headquarters in Tokyo, Japan, October 22, 2017. REUTERS/Kim Kyung-Hoon/File Photo

(reuters_tickers)

By Linda Sieg

TOKYO (Reuters) - A former aide to Japanese Prime Minister Shinzo Abe on Tuesday denied a media report that he had intervened to help win approval for a friend of the premier to set up a new veterinary school, the latest twist in suspected cronyism scandal.

Abe's support has been undermined by several scandals over suspected cronyism and cover-ups, raising doubts about how long he can remain in power and whether he can achieve his cherished goal of revising Japan's pacifist, post-war constitution.

His domestic troubles are mounting ahead of a summit with U.S. President Donald Trump next week and an expected onslaught from Trump over Japan's trade policies.

In the latest bad news for Abe, the Asahi newspaper reported on Tuesday that a former Abe aide, Tadao Yanase, had told local authorities in 2015 that a plan by Abe's friend for a veterinary school in a government-designated deregulation zone was a "prime ministerial matter" and they should work hard to realise it.

Abe has repeatedly denied that he ever instructed officials to give preferential treatment to his friend, Kotaro Kake, the director of school operator Kake Gakuen, who wanted to open the school - Japan's first new veterinary school in more than 50 years.

Yanase, now a senior official at the Ministry of Economic, Trade and Industry, said he had not met authorities in Ehime prefecture or the city of Imabari, in the special economic zone, to discuss the project.

Economic zone status exempts some localities from national regulations, in this case, limits on the number of veterinary schools. Kake Gakuen got approval to open the school in Imabari.

"As I have stated in parliament, as the prime minister's secretary, I met many people every day but as far as I recall, I did not meet people from Ehime prefecture or Imabari City," Yanase said in a statement.

"I did not have specific conversations with outsiders that this matter was a prime ministerial matter."

The Asahi newspaper cited a document it said appeared to have been prepared by Ehime officials. Ehime's governor said the prefecture would look into the report, Kyodo news agency said.

SAGGING SUPPORT

The affair, which emerged last year, is one of several suspected cronyism scandals and cover-ups eroding Abe's support as he eyes a third term as ruling Liberal Democratic Party leader in a September vote. The scandals have led to opposition calls for Abe to resign.

Victory in the party poll would set Abe, who took office in 2012 pledging to reboot the economy and bolster defence, on track to become Japan's longest-serving premier.

Support for Abe's cabinet fell six points to 38 percent in a weekend survey by broadcaster NHK, while his disapproval rate rose seven points to 45 percent, topping his approval rate for the first time in half a year.

Abe has also denied that he or his wife intervened in the sale of state-owned land to another school operator, Moritomo Gakuen, which had ties to Abe's wife, Akie.

Doubts over the sale deepened on Monday when a finance ministry official said another official had proposed crafting a cover story with the school operator to justify the steeply discounted price.

The ministry said last month it had altered documents relating to the land sale, prompting opposition calls for Finance Minister Taro Aso to resign. Aso has rejected the calls.

Abe's government is also under fire after his defence ministry said the army last year found activity logs from a controversial 2004-2006 deployment to Iraq, but did not tell his predecessor, who had told parliament they could not be found.

The logs could shed light on whether the deployment was to a "non-combat zone" as asserted by the government at the time, in line with constitutional limits on military operations overseas.

"Revelations keep emerging, and I think Abe is in a tough spot," said Tomoaki Iwai, a political science professor at Nihon University.

(Additional reportng by Kaori Kaneko)

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Reuters