Naoto Kan, Japan's prime minister, is locked in an extremely close race with ruling Democratic party challenger Ichiro Ozawa, according to media surveys of the party members that will decide this month’s DPJ leadership election.

No clear leader has emerged ahead of the September 14 vote, which will decide whether Mr Kan can extend his three months in office. Victory

Mr Ozawa's decision to challenge Mr Kan for the leadership has cast doubt over the direction of Japanese economic policy and raised fears within the DPJ that the party might split. However, both candidates have stressed that they would continue to work together regardless of the outcome.

The DPJ's complex leadership election system – which gives a vote to DPJ Diet members, local assembly delegates and party supporters – makes forecasting a result hazardous. But polls suggest that neither candidate has established a dominant lead.

The latest survey by the mass circulation Yomiuri newspaper showed Mr Kan and Mr Ozawa running "neck and neck". Both men had the support of about 160 of the 412 Diet members who account for just under 70 per cent of the voting "points" in the poll.

The Yomiuri said Mr Kan was matching Mr Ozawa's support even among first-term "freshman" legislators. The group is widely seen as an important support base for the challenger, an ruling party heavyweight who was closely involved in selecting DPJ candidates ahead of last year's historic general election.

Kyodo news agency found Mr Ozawa had a slight edge among Diet members, but said its survey of local assembly members found the prime minister with a 65-35 lead.

Mr Kan is expected to command a strong lead among the DPJ's 340,000 members and supporters. Local assembly delegates and party members and supporters together account for just over 30 per cent of voting "points" in the leadership election.