TOKYO (Kyodo) — Japan’s ruling and opposition parties agreed Monday to abolish controversial policy activity funds that legislators can spend without disclosure, as part of efforts to regain public trust in politics.

The agreement comes after Prime Minister Shigeru Ishiba’s Liberal Democratic Party, at the center of a slush money scandal, and its junior coalition partner lost their majority in the House of Representatives in the general election on Oct. 27.

The LDP dropped its earlier demand to exempt some funds from disclosure and instead decided to back a bill submitted by the Constitutional Democratic Party of Japan and six other opposition parties in the lower house.

The bill to implement the change is expected to be approved by the chamber on Tuesday. Policy activity funds, allocated to legislators by their parties to expand their influence and carry out research and other projects, have been criticized for a lack of transparency.

With the extraordinary Diet session scheduled to wrap up next week, the ruling and opposition camps also agreed to postpone their decision on another contentious issue — how to handle donations from companies and other entities — until the end of March.

The coalition ruling of the LDP and the Komeito party still maintains its majority in the House of Councillors but no longer controls the more powerful lower house, meaning support from the opposition bloc is essential for passing bills and budgets.

Ishiba has pledged to improve transparency in political funding, including revising the political funds control law. The LDP has faced intense scrutiny since revelations in late 2023 that some of its factions created slush funds by underreporting income from fundraising events.

Despite calls for party renewal and greater transparency, the LDP had argued that some political funds should remain undisclosed, citing the need to protect sensitive information related to diplomacy, national security and individual firms.

But the opposition parties lambasted the LDP’s move, with CDPJ chief Yoshihiko Noda describing it as producing another type of “black box.” The LDP’s reliance on corporate donations is markedly higher than that of other parties.

In a related development, the LDP and the main opposition CDPJ will back a plan to establish a third-party entity to oversee political funds, as proposed by Komeito and the Democratic Party for the People, which gained momentum after the general election.