Japan two-party politics in doubt as drubbing of Democrats looms By Linda Sieg TOKYO (Reuters) - Four years after the Democratic Party of Japan swept to power in a historic election ending decades of one-party dominance, the DPJ looks set for defeat in next month's upper house poll, raising doubts about its future and prospects for a two-party system that spurs policy debate and weakens vested interests. The victory by the novice DPJ in 2009 was supposed to signal the coming of age of a two-party system in which two big parties swapped power, ending decades of nearly unbroken rule by the conservative Liberal Democratic Party (LDP). That in turn, optimists had hoped, would break the triangle of ruling politicians, bureaucrats and vested interests such as farmers, doctors and companies that had ossified over time, hampering Japan's response to global and domestic changes. Now, however, disillusioned voters appear likely to shun the Democrats in a July 21 upper house poll, mirroring the results of a December lower house election and a Tokyo vote last month. Four years ago, a candidate could get elected just by running on the DPJ ticket. This time, it was exactly the reverse," said Fumiyoshi Kadowaki, 59, who failed to win a seat in a Tokyo assembly election in which the DPJ won a mere 15 out of 127 seats. Whatever a candidate's ability and activities, it was not enough ... We can expect very tough results in the upper house and after that, it's hard to know what will happen. The LDP and its junior partner, back after a huge win in the December lower house poll and buoyed by hopes for Prime Minister Shinzo Abe's economic policies, look set to romp to victory in the upper chamber. That would cement Abe's grip on power as he strives to end prolonged stagnation and push a conservative agenda centered on revising Japan's pacifist constitution. The prospect has some pundits forecasting that the DPJ, founded in 1998 by a core of center-left lawmakers, might fade away or try to regroup under a new banner. "The label has become so tarnished that those who are able to win ... may be tempted to found a new party," said Sophia University political science professor Koichi Nakano. Critics blame inexperience and weak leadership, disunity and an inability to keep pledges to change how Japan is governed by breaking bureaucrats' hold on policymaking and paying more heed to consumers than companies for the tainting of the DPJ brand. The fractious party had three leaders during its 2009-2012 rule, splitting last year after a band of defectors left to protest an agreement with the then-opposition LDP to double the 5 percent sales tax by 2015 to fix Japan's tattered finances. "People decided they could not entrust the government to people who could not unify," DPJ policy chief Mitsuru Sakurai told Reuters in an interview. In a word, people didn't want to see a fight between husband and wife. The LDP and New Komeito together will almost certainly win a majority in the upper house, which can block most legislation. That result would end the "twisted parliament" that has foiled policy implementation since 2007 when the LDP - then led by Abe in his first troubled term - suffered a humiliating defeat. The DPJ, which won just 57 seats in last year's election for the 480-member lower house, could win as few as 20 of the 121 seats up for grabs in the 242-member upper house, Nakano said. Abe wouldn't have a free hand even so, but meaningful opposition to his policies would come from within the LDP or from the more dovish New Komeito - a situation pessimists say bodes ill for Japanese democracy. But while some doubt Japan will ever have a true two-party system given a lack of deep social cleavages, others say Japan's electoral system still pushes in that direction. Most MPs are elected from single-member districts where big parties have an advantage over smaller rivals. With no guarantee that "Abenomics" will work a cure of what ails the world's third-biggest economy, dissatisfied voters may in a year or two be looking for somewhere else to cast their ballots. In contrast to Abe's focus on ending deflation with hyper-easy monetary policy, the DPJ wants to boost disposable income to increase demand and beef up social security to remove anxiety about the future that depresses spending, Sakurai said. Voters may also be put off if Abe shifts his focus from fixing the economy to conservative pet projects such as revising the constitution to ease restraints on Japan's military. Backing for the LDP is anyway less solid than its recent election wins suggest - the party won almost 57 percent of the lower house seats with less than a third of votes cast. "We can recover," said DPJ upper house member Renho, who goes by one name. It is not possible that the DPJ will simply collapse ... All we can do is put forth a proper opposing stance and prepare for the next election. There is no magic bullet. Editing by Nick Macfie