Japan's ruling DPJ defectors launch new party (2)

The plans call for Japan's sales tax to be doubled from its current five percent to 10 percent by 2015, with an interim hike to eight percent in 2014.

Noda himself indicated in a national new year's address Wednesday that relations were strained within the ruling party and a Cabinet reshuffle was imminent to replace disgraced Defense Minister Yasuo Ichikawa over a spat of gaffes made about U.S. Marines being in Okinawa Prefecture and remove consumer affairs minister Kenji Yamaoka from his current post.

Both were slapped with censure motions by Japan's upper house of parliament last month, but the move will drive a further wedge through an already splintered DPJ as Ichikawa and Yamaoka's appointment's were originally made to show party unity as both ministers belong to a powerful DPJ intraparty group headed by the party's "shadow shogun" Ichiro Ozawa.

As the rift in the DPJ widens, main opposition Liberal Democratic Party leader Sadakazu Tanigaki on Wenesday lambasted the prime minister for his pledges made earlier in the day.

"Noda's proposal to increase the consumption tax rate is in violation of the DPJ's policy pledges during the 2009 general election," the LDP chief said.

Tanigaki told local reporters following Noda's address that the DPJ leader should dissolve the lower house of parliament and call a snap election.

"The DPJ has no right to propose raising the sales tax rate and Prime Minister Noda cannot do it unless he goes to the people," Tanigaki was quoted by local media as saying in Ise City, Mie Prefecture.

For Noda's part however, and in response to the defectors' forming of a new party which plans to obstruct the prime minister' s signature policies, the prime minister who must cajole support from opposition members who control Japan's upper house of parliament, said he hopes the DPJ can continue to work together in unison.

"It's regrettable, but we, the DPJ, will work in concert down the road to grapple with the challenges Japan is encountering," Noda said of the issue. "I want all ministers to work as one," the prime minister said.

The number of DPJ members and DPJ-affiliated lawmakers in Japan 's more powerful lower house of parliament will now fall to 293.

The new party's name "Kizuna" means solidarity or bonds between people and was a widely used word in the days, weeks and months following the devastating March 11 earthquake which struck Japan's northeast coast and triggered a killer tsunami that sparked a monumental nuclear crisis.