TOKYO, July 6: Just when the ruling Liberal Democratic Party (LD!*) needs their money most. Japan's big companies, financially strapped and uncertain about the political future, are dragging their feet, industry sources said on Monday, reports Reuter.

Japan hit the campaign trial on Sunday for the July 18 snap elections Prime Minister Kiichi Miyazawa called last month after a no-confidence vote toppled his government. The vote came after Miyazawa failed to enact the political reforms he had repeatedly promised.

"Leaders (in major industries) must feel troubled about how to cope with the current political situation," said an export-oriented industry source. "If the LDP were to continue to have a majority in the lower house, it would be no problem."'

As well as donations made to the LDP through the People's Political Association, which pools funds from business groups and individual companies, big companies have traditionally funded LDP politicians with direct donations.

The Japan Federation of Economic Organisations (Keida nren),. as secretariat for the People's Political Association, decides how much each company must donate to the 12 billion yen (110 million dollar) to 13 billion yen (119 million dollar) total given annually to the LDP.

But Keidanren chairman Gaishi Hiraiwa, said individual company donations to the LDP dwarf those of the association.

The reality is that the money needed for political activity • is so huge that funds through Keidanren are small,"

he told reporters.

Business sources estimate that political donations funnelled through Keidanren account for only about 10 per cent of total corporate donations.

On Friday, both the Finance Minister and the Construction Minister said that they had asked for political funds from industries within their jurisdiction.

Japan's laws on political funding for politicians and cabinet ministers do not bar them from accepting funds from industries, even those within their own jurisdictions.

Japanese newspapers also reported last week that the LDP had asked for three billion yen (27.5 million dollar) each in election funds from six major industries — banking, automobile. electronics, construction, electric power and steel.

No industry official has so far confirmed the report. But a Japanese daily, the Mainichl Shimbun, reported on Saturday that Yutaka Kume, chairman of the Japan Automobile Manufacturers Association, ‘told Keidanren chairman Hiraiwa that his industry could not meet the request.

On Saturday, Nippon Steel Corp Chairman Hiroshi Saito was quoted by business daily Nihon Keizai Shimbun as saying that the steel Industry, hurting from the economic slump, is in no position to provide new campaign funds to the LDP.

Hiraiwa said on Monday he had no direct knowledge of the LDP's requesting funds from the six industries in addition to the usual People's Political Association contributions.