TOKYO -- Japanese Prime Minister Morihiro Hosokawa faced a leadership crisis Thursday after partners in his ruling coalition forced him to abort a plan to oust his maverick chief of staff.


After two weeks of wrangling that paralyzed the government, Hosokawa gave up the idea of a cabinet reshuffle aimed at removing Masayoshi Takemura from the post of chief cabinet secretary and government spokesman.


The debacle has damaged Hoso-kawa's reputation, commentators say, and polarized the eight-way alliance into two camps, raising the possibility of a breakup when the next crisis hits.


"The coalition is no longer functioning as a joint body with the purpose of drafting government policy," said political columnist Minoru Morita.


"What's happening here is internal warfare as two groups -- one behind Takemura and the other backing Hoso-kawa and his main supporter, Ichiro Ozawa -- struggle for dominance and power."


Talk of a cabinet reshuffle surfaced last month after Takemura openly challenged Hosokawa on policy issues, in particular his proposal for a new value-added tax to pay for income tax cuts.


At the root of the reshuffle plan is a power struggle between Takemura and Ozawa, who at the start of Hosokawa's rule were his two closest advisers.


As their views diverged, Hosokawa at first sat on the fence before recently siding with Ozawa's side infuriating Takemura in the process.


Takemura, backed by the Socialists and centrist parties, favors consensus-building among coalition partners while Ozawa favors a top-down ruling style that Hosokawa finally agreed to adopt -- only to spark a crisis.


An embarrassed prime minister told parliament Thursday he was ready to go back to consensus-building in hopes of keeping the coalition together.


"In a coalition government, decisions have to be worked out with all the partners and it's not always possible to carry out one's plans," said Hosokawa.


Opposition leader Yohei Kono launched a verbal assault on Hosokawa and his coalition partners, accusing them of indulging in a power struggle while ignoring the country's economic woes.


"This is not the time for power games," Kono bellowed in parliament. "You should be dealing with the affairs of the nation and the problems of the people."


Coalition infighting has badly delayed a series of crucial bills and government business in the past few months. Crises have been only barely averted after threats to break up the alliance.


Masayoshi Ito, onetime prime ministerial aide, predicted the power struggle would intensify, leaving the government impotent. "Ozawa lost this round but the fight's not over," he said.


Some observers believe that had Ozawa prevailed, Tokyo might have moved more swiftly to resolve its tense trade dispute with Washington, which wants Japan to open its markets and slash its almost $60 billion trade surplus with the United States.


Ozawa, who has helped settle past U.S.-Japan trade disputes, indicated recently that Japan could consider setting nonbinding, voluntary goals to help pry open its markets.


While Ozawa may be temporarily on the defensive, analyst Morita believes Hosokawa was the main loser in the battle of the coalition titans.


"He failed to get through the new tax, to ease U.S.-Japan trade tensions at the summit in Washington and to resolve this embarrassing power struggle," said Morita.


Korean Site Inspected


n SEOUL (Reuters) -- Experts from a UN watchdog agency have carried out their first inspection of North Korean nuclear facilities in more than a year, a spokesman said Thursday.


"They inspected facilities at Yongbyon," said Hans Mayer of the International Atomic Energy Agency, or IAEA, referring to sites the West suspects may be involved in making nuclear weapons.


Mayert said no obstacles were encountered. The IAEA is inspecting North Korea's seven declared sites.


Earlier Thursday, South Korea announced Thursday a conditional suspension of war games with the United States but was hit an immediated deadlock in talks with North Korea on exchanging envoys. The two agreed to meet next Wednesday.