TOKYO - Japan's Yasuo Fukuda was to be selected prime minister on Tuesday, then form a cabinet that must confront a resurgent opposition keen to force an early election.

The ruling Liberal Democratic Party (LDP) chose Fukuda, a 71-year-old seasoned moderate, as its leader on Sunday to revive party fortunes after a disastrous year of scandals and election defeat under Shinzo Abe, who resigned abruptly on Sept. 12.

Fukuda, a proponent of warmer ties with Japan's Asian neighbours, will be voted in as prime minister by parliament's lower house, where the ruling camp has a huge majority.

In a sign of the battles ahead, the opposition-controlled upper house was expected to vote for Ichiro Ozawa, leader of the main opposition Democratic Party, but the vote by the more powerful lower chamber takes precedence.

"(The LDP) may deceive the people or they may take makeshift measures, but this will not last long," Democratic Party lawmaker Kenji Yamaoka told a news conference. "We feel strongly that a change in administration should take place as soon as possible."

Fukuda, for his part, reiterated that he wanted to discuss policy matters with the Democrats and other opposition parties.

"I want to have dignified discussions with the aim of protecting the people's livelihoods and the national interests," he told reporters.

The seemingly bland but sometimes testy Fukuda will become the oldest new prime minister since Kiichi Miyazawa assumed the office in 1991 at the age of 72, and the first son of a premier to hold the post.

Japanese media have reported that Fukuda will likely retain most ministers -- including Finance Minister Fukushiro Nukaga -- from Abe's cabinet, which was reshuffled just last month in an attempt by the outgoing premier to maintain his grip on power.

Fukuda said former Foreign Minister Taro Aso, Fukuda's sole rival in the LDP leadership race, declined an offer of a cabinet post, but added he was still seeking his cooperation.

BATTLES AHEAD

Fukuda on Monday tapped faction leaders who had backed his bid for the top job as his party lieutenants, prompting criticism from the opposition and some media for relying on old-style factional dynamics and cronyism in his personnel decisions.

Looming large among the battles for Fukuda is one over extending beyond Nov. 1 a Japanese naval mission in support of U.S.-led operations that opposition parties do not favour.

The Democrats and their small allies won a majority in a July upper house election and can delay legislation, including a bill to extend the mission to refuel coalition ships in the Indian Ocean that close ally Washington is anxious to see continued.

Fukuda will also have to balance calls to pay more heed to regions and sectors left behind by reforms begun under Abe's predecessor, Junichiro Koizumi, with the need to rein in spending because of Japan's huge public debt, and find ways to fix social welfare creaking under the weight of a fast-ageing population.

Despite Fukuda's calls for consultation, Democratic Party leader Ozawa appears bent on a showdown that could spark a lower house poll.

No election for the lower chamber need be held until late 2009, but many expect one sooner, possibly after the national budget is enacted in March 2008.

Outgoing Prime Minister Shinzo Abe, who has been hospitalised for a stress-related stomach ailment since the day after he resigned, told a final meeting of his cabinet that it "breaks his heart" to leave office when the country faces so many problems, Chief Cabinet Secretary Kaoru Yosano told a news conference.

Abe, who received flowers and applause as he left his official residence, apologised at a news conference on Monday for creating a political vacuum with his shock Sept. 12 resignation.