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Finance Minister Shoichi Nakagawa submitted a letter of resignation to Prime Minister Taro Aso on Tuesday evening, which the prime minister accepted.

Nakagawa, 55, resigned to take responsibility for causing a controversy by slurring his words and appearing to be dazed during a press conference after the Group of Seven finance ministers and central bank governors' meeting in Rome on Saturday.

Shortly after noon Tuesday, Nakagawa said he would resign only after the fiscal 2009 budget and related bills passed the House of Representatives.

In the afternoon, the opposition parties submitted a censure motion against Nakagawa to the House of Councillors, calling for his immediate resignation.

"After seeing only the ruling parties taking part in discussions at the [lower house] Budget Committee meeting [because the opposition refused to attend], I thought it would be better for the country that I quit [immediately]," Nakagawa told reporters at the Prime Minister's Office after submitting the letter of resignation to Aso.

Kaoru Yosano, state minister in charge of economic and fiscal policy, will expand his cabinet portfolio by taking over Nakagawa's post. Some predict a new finance minister will be appointed after the fiscal 2009 budget has passed.

The Aso Cabinet has been driven further into a corner by the Nakagawa debacle as the incident has sparked severe criticism both at home and abroad over the fact that the finance minister was forced to resign at a time when economic recovery should be the government's top priority.

The opposition parties are prepared to call Aso to account for appointing Nakagawa finance minister.

"It's a decision he [Nakagawa] made after taking into consideration his health and other things," Aso said of Nakagawa's resignation while speaking to reporters Tuesday evening at the Prime Minister's Office. "I'd like to respect his decision."

Aso also said, "I chose a capable person for the job. But if you say I'm responsible for appointing him to the post, seeing what has happened, then I would think so, too."

Nakagawa looked dazed and his speech was slurring during the press conference in Rome on Saturday. He also said things that were factually wrong, such as citing an incorrect figure for Japan's policy interest rate. He later explained that it was a side effect of a cold medicine he took that day.

The demand for his resignation to end the fiasco grew even among the ruling coalition parties, among members of New Komeito in particular, and Nakagawa was left with no choice but to resign.

Now that Nakagawa has resigned, the opposition are planning to withdraw the censure motion on Wednesday.

Nakagawa is the second minister to resign from the Aso Cabinet after former Construction and Transport Minister Nariaki Nakayama.

"I wanted the budget and related bills to pass the Diet as soon as possible, but I realized that the situation was making it difficult for my wishes to come true," Nakagawa said at a press conference held at the Finance Ministry on Tuesday evening, explaining why he changed his mind in the space of half a day and quit immediately.

"I made the decision [to quit] after seeing and feeling it myself in the afternoon how the lower house's Budget Committee meeting went and how it was suspended for several hours," he added.

But he stressed that his drinking and taking cold medicine had no ill effect on the G-7 summit in Rome.

From Yomiuri Shimbun