By Linda Sieg and Ami Miyazaki
TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe did not donate money to the operator of a nationalist school at the heart of a scandal that is chipping away at the government's support ratings, Chief Cabinet Secretary Yoshihide Suga said on Thursday.
Abe has denied that either he or Akie intervened in a murky land deal by the operator of the school, whose curriculum includes prewar-style patriotic education, or in the process of getting accreditation by local authorities.
For now, political analysts say Abe looks likely to ride out the scandal, which has also ensnared his defense minister.
But the furore is distracting at a time when Japan needs to focus on looming economic talks with U.S. President Donald Trump's administration and a plethora of domestic issues including structural reforms to generate growth.
News of the fresh twist in the scandal saga came as U.S. Secretary of State Rex Tillerson was in Tokyo to meet his Japanese counterpart and Abe at the start of an Asian trip.
"The reality is that this comes at a very bad time," said Jesper Koll, CEO of asset manager WisdomTree Japan. "The probability is very high that Abe will still be prime minister in three or 12 months, but it is still a distraction."
Suga said he had confirmed with Abe that he had not made such a donation himself or through a third party including his wife, Akie. He added that the government was checking whether Akie had made donation as a private person.
The school's principal, who said last week he was resigning, told a group of parliamentarians earlier in the day that money donated by Abe was included in funds for an elementary school he had planned to open next month.
Opposition lawmakers told reporters that the principal had told them 1 million yen ($8,800) was donated through Akie in 2015.
After weeks of resisting, Abe's ruling party agreed on Thursday to an opposition demand to summon the principal, Yasunori Kagoike, as a sworn witness to testify in parliament on March 23, parliamentary sources said.
ABE SUPPORT SLIPS
"According to what I confirmed with the prime minister, the prime minister himself made no donation," Suga told a news conference.
"The prime minister himself did not make a donation nor did he do so through Akie Abe or a third party. In reality, there is no need to reply but just to be sure, we are checking whether Mrs. Abe made a donation as a private person."
Following weeks of questions in parliament about the affair, support for Abe fell five points to 50 percent, a weekend poll by the Mainichi newspaper showed, off highs hit after last month's summit with Trump.
The scandal has also put Defence Minister Tomomi Inada, a close Abe ally once seen as a potential successor, in the hot seat after she had to correct a statement about her links to the principal and his educational group, Moritomo Gakuen.
She had told a parliamentary panel she had never appeared in court on his behalf, but corrected her comment and apologized this week after court documents showed that she had.
Inada has also come under fire for her handling of a debate on a controversial peace-keeping operation in South Sudan.
Abe abruptly ended his first 2006-2007 term as premier after a year marked by scandals in his cabinet, a stunning election loss and ill-health.
He returned for a rare second term in December 2012 and has a shot at becoming Japan's longest-serving leader after party changes to a rule allowing him to serve a third consecutive three-year term after his current tenure ends in 2018.
(Reporting by Linda Sieg; additional reporting by Tetsushi Kajimoto; Editing by Nick Macfie)