Japan court clears Ichiro Ozawa, prompting talk of challenge to PM Ichiro Ozawa, a powerful figure in Japan's governing party, has been cleared of corruption. Photograph: Yoshikazu Tsuno/AFP/Getty Japan's prime minister, Yoshihiko Noda, faces a potential threat to his leadership after Ichiro Ozawa, a rival and powerful figure inside the governing party, was acquitted of breaking political funding laws. TV networks broke into scheduled programming to report Ozawa's acquittal by a Tokyo court on Thursday morning. The decision has reignited speculation about a possible challenge to Noda's leadership over controversial plans to double consumption tax to 10% by 2015. Although he has never been prime minister, Ozawa is known as the "shadow shogun" for the influence he wields behind the scenes. He leads the largest faction inside the ruling Democratic party of Japan (DPJ) and is credited with orchestrating the party's historic victory in the 2009 general election. Opinion is divided over whether Ozawa, 69, will act on his vocal opposition to Noda's plans to reform the tax - Japan's equivalent of VAT or GST - or even challenge him for the leadership. Whoever is DPJ leader is assured of the prime ministership because of the party's large majority in the lower house. The prospect of an early general election may dissuade Ozawa's supporters from opposing the tax rise, which Noda has said is unavoidable if Japan is to tackle its huge public debt, now twice the size of its US5tn economy. Ozawa had pleaded not guilty to violating political funding laws over the purchase of land in 2004 by his management group, Rikuzan-kai. Prosecutors in Tokyo decided not to charge him due to lack of evidence but he was brought to trial six months ago after a citizens' panel twice called for him to be indicted. Court-appointed lawyers had demanded a three-year prison term for Ozawa. Three of his former aides were given suspended prison sentences last year - they have appealed. The public's fascination with Ozawa was in evidence again on Thursday, with more than 1,800 people queueing up for the 46 seats in the public gallery. Dozens of supporters cheered outside the court building, carrying placards with his picture on one side and "innocent" on the other. The acquittal marks yet another comeback for a deeply divisive politician who has yet to fulfil a lifetime ambition to lead Japan. Having helped the DPJ secure victory in 2009 by handpicking young candidates to contest key seats, he was beaten to the leadership a year later by Naoto Kan. Ozawa later failed to push through a no-confidence motion against Kan and saw his favoured candidate to lead the party defeated by Noda following Kan's resignation last year. Experts said Ozawa may be forced to watch from the sidelines given that his supporters, thought to comprise about a third of DPJ lower house MPs, have been marginalised in the party. Ozawa's influence would be further diminished if, as some analysts have suggested, Noda agrees to call an early election in exchange for opposition support for the sales tax increase. Opposition parties currently control the upper house, where they can block legislation. Kenji Yamaoka, a DPJ lawmaker and Ozawa supporter, ruled out any immediate challenge to the party leadership. "We are not seeking blind confrontation," he told the TBS network. We are not thinking about a power struggle in the party. But at the very least his acquittal will fuel calls from Ozawa's supporters to reinstate his party membership, which was suspended after his indictment. That would give him the option of running for party leader in September, when Noda's term as DPJ president expires. "He is not completely finished yet but I think his leadership role is over," Gerald Curtis, a professor at Columbia University, told Reuters just before the court ruling. Michael Cucek, a consultant who blogs about Japanese politics at Shisaku, said: "Ozawa has been the most influential, hated and fascinating politician of the last 30 years. However, whatever happens today will not shake the political world to its roots. Its branches may shiver a bit - but that is all.