TOKYO - Support for Japan's new cabinet is riding high at 71 percent, but in one sign of possible trouble ahead, the same percentage of voters are unhappy with the prime minister's explanation of funding scandal, a survey showed on Monday.

The Oct 2-4 Yomiuri newspaper survey of 1,116 voters coincided with Japanese media reports that prosecutors had begun questioning people whose names were incorrectly listed as political donors to Prime Minister Yukio Hatoyama.

Hatoyama acknowledged in June that his aide had misreported some donations, but said the money came from his personal funds.

Authorities have started to investigate and I would like to fully cooperate so that everything becomes clear, Hatoyama told reporters on Monday.

Through that, I hope that the day will come soon when the people can understand.

Hatoyama took office on September 16 after his Democratic Party trounced its long-dominant conservative rival, bringing to power an administration that aims to radically change how the country is run, wean the economy from exports and create more equal ties with close ally Washington.

He has spent much of his time in office on voter-pleasing diplomatic travel, but keeping support high will only get harder as the government faces headaches, including finding funds to pay for programs to put more money in consumers' hands.

When an opposition party becomes a ruling party, it usually hits a wall when it tries to actually implement proposed policies, political analyst Atsuo Ito said.

But so far, it has been successful in appealing to the public with its intention to push for drastic reform.

The support for Hatoyama's cabinet was only slightly down from the 75 percent in an initial poll after he took office, a level second only to ratings for charismatic leader Junichiro Koizumi, who took power in 2001 promising bold reforms.

Previous polls have shown that voters were not fully satisfied with Hatoyama's explanation. Still, they gave his party a landslide victory in an August 30 election.

COALITION AND BUDGET WOES

Analysts say the political impact of the incident will depend on whether prosecutors bring charges against his aide or find that Hatoyama himself was involved.

Hirofumi Hirano, the government's top spokesman and the prime minister's right-hand man, told a news conference that Hatoyama would likely wait for the prosecutors' findings before explaining himself further to avoid any impact on the investigation.

Hatoyama must also keep happy two tiny partners whose support is needed in parliament's less powerful upper house without exposing huge gaps over policies.

About half the 1,116 voters surveyed said they were unhappy with the DPJ's coalition links with the two parties. That was a possible reflection of turmoil sparked by the head of one ruling bloc partner with his proposal for a loan moratorium for small firms.

Hatoyama's cabinet is trying to identify projects to cut from an already enacted 14 trillion yen ($156 billion) extra budget to help fund its own programs, but so far appears short of the mark.

That means the government may have to borrow more and further inflate a public debt already about 170 percent of GDP. It must then produce a budget for the next fiscal year that starts in April.

The short-term challenge is compiling a budget for the next fiscal year, including to what extent they can include steps promised in their campaign platform and whether they will have to issue deficit-financing bonds if they cannot find the resources to finance them, analyst Ito said.

Hatoyama's proposed target of a 25 percent cut in greenhouse gas emissions from 1990 levels by 2020 -- opposed by many businesses for fear it would hurt global competitiveness -- got the backing of 75 percent of those surveyed.

But nearly 70 percent opposed a proposed elimination of expressway tolls, a step environmentalists say runs counter to efforts to fight global warming.

The Yomuiri newspaper gave no margin of error for its survey.

($1=89.79 yen)

(Additional reporting by Yoko Kubota; Editing by Sugita Katyal)

Japan