Japan’s ruling Liberal Democratic party has failed to reconcile its need to win elections with its duty to broach the issue of tax increases, Sadakazu Tanigaki, finance minister, said yesterday.

In an interview with the Financial Times, Mr Tanigaki, one of four LDP members expected to vie for the premiership when Junichiro Koizumi steps down in September, said: “The most delicate political issue will be how to combine [next summer’s upper house] election with discussion of the taxation system.