Japanese prosecutors made their first arrest on Sunday in connection with a major political slush funds scandal that has rocked Prime Minister Fumio Kishida’s already unpopular government.

Tokyo District Public Prosecutors Office said in a statement it apprehended former vice-education minister Yoshitaka Ikeda on suspicion of failing to report fundraising proceeds he received from his faction within the governing Liberal Democratic Party (LDP).

Mr Ikeda’s faction, which used to be led by the late former Prime Minister Shinzo Abe who was assassinated in 2022, has remained the largest and most influential within Mr Kishida’s ruling party.

The faction is suspected of failing to report more than 600 million yen ($6.19 million).

The former vice minister was accused of not reporting the extra money he received from political event ticket sales from his faction, a violation of the political funds control law.

He allegedly falsified the compulsory report of his political funds’ management organisation and excluded more than 48 million yen (about $494,910) over the past five years from 2018 to 2022, by colluding with his aid, the prosecutors’ office said.

The sum was quite large compared to the 10 million yen (nearly $103,106) allegedly received by each of several others implicated in the scandal.

Mr Ikeda’s aid, Kazuhiro Kakinuma, was also arrested Sunday.

Mr Kishida said on Sunday the arrest was “extremely regrettable” and that the party has decided to expel Mr Ikeda.

He reiterated that he took the matter seriously and his plans to set up an expert panel later this week to start discussing ways to strengthen fundraising regulations.

“We must have a strong sense of crisis and make an effort to regain public trust,” Mr Kishida told reporters.

Last year, dozens of LDP politicians, mostly members of the Abe faction, were accused of systematically failing to report about 600 million yen in funds in possible violation of campaign and election laws, according to media reports.

The money is alleged to have gone into unmonitored slush funds.

Mr Kishida replaced four of his Cabinet ministers linked to the scandal in December in an attempt to mitigate the scandal that has rocked his party and grip on power.

Former top government spokesman Hirokazu Matsuno and Economy and Trade Minister Yasutoshi Nishimura were among those removed.

Prosecutors reportedly interviewed the two top officials on a voluntary basis, along with several other senior LDP politicians.

Support ratings for Mr Kishida have continued to drop, falling below 20 per cent despite purging members of the Abe wing involved in the scandal. This move could trigger an internal power struggle within the ruling party.

The party’s factions have traditionally set quotas for each poltician on the sale of fundraising party tickets, usually at 200,000 yen (about $2062) each. Proceeds from tickets exceeding the set amount are paid back to factions.

Under the political funds control law, a politician’s accountant is responsible for filing financial records. Unless there is proof an accountant was given explicit orders to falsify records, politicians can’t be charged.

If convicted, a violator could face up to five years in prison or a fine of up to 1 million yen (nearly $10,310).

The LDP has almost continually ruled postwar Japan. It has faced repeated infamy with the 1970s Lockheed bribery, an insider trading and corruption scandal in the 1980s, among other money scandals.

The current fundraising scandal is considered one of the biggest blunders in decades by the powerful party.

However, LDP’s grip on power is seen unchanged as long as the opposition remains fractured, though Kishida’s leadership is shaking.

The prime minister doesn’t have to call a parliamentary election until 2025, but the Liberal Democratic Party has a leadership vote in September.

AP