TOKYO: Japan's National Tax Agency chief, under fire for remarks about a suspected cronyism scandal, is expected to step down, but his resignation looked unlikely to end the furore which threatens to erode Prime Minister Shinzo Abe's popularity.

A ruling party source said on Friday that Nobuhisa Sagawa would quit as the head of the tax agency. Public broadcaster NHK and other media also reported that Sagawa was due to step down.

Finance Minister Taro Aso, who appointed Sagawa, would hold a news conference at 7:40 p.m. (1040 GMT), his ministry said.

Sagawa has been accused of trying, last year, to dispel suspicion that a school operator with ties to Abe's wife, Akie, got a sweetheart deal on land for a school in the city of Osaka helped dent the premier's popularity.

Abe has denied that he or his wife did favours for the former head of school operator Moritomo Gakuen, Yasunori Kagoike.

Kagoike and his wife were arrested in July on suspicion of illegally receiving subsidies.

Abe, in his sixth year in office and eyeing a three-year extension from September, had seemed to put the matter behind him with a big election win for the ruling bloc in October.

But opposition parties have turned up the heat again after the Asahi newspaper said some documents about the land sale might have been doctored.

That followed revelations that the finance ministry had retained documents that officials had said no longer existed.

Last year, Sagawa, then the head of the ministry's financial bureau, told parliament the materials had been discarded.

A senior lawmaker from the opposition Constitutional Democratic Party of Japan told reporters that Sagawa's resignation would not bring the affair to a close.

"If those in power intend to use Mr. Sagawa's resignation to draw a curtain (on the scandal), we cannot accept that. I believe this is a matter over which politicians should take political responsibility," Kiyomi Tsujimoto told reporters.

POSSIBLE SUICIDE

Aso, a close Abe ally, could end up in the hot seat if it turns out that officials of his ministry altered approved documents.

Media said on Friday police were investigating as a possible suicide the death of an official at a finance ministry bureau that handled the land deal at the centre of the scandal.

The official in the region where the school is located was found dead at his home on Wednesday and police are investigating the matter as a suicide, Kyodo and Jiji news agencies said.

A police spokesman declined to comment.

Chief Cabinet Secretary Yoshihide Suga told a regular news conference that he had been notified about the death of the official but declined to give any details. He said he did not know whether the official had been questioned by prosecutors.

Protesters demanding the resignations of Sagawa and Aso - who had said the tax agency head's appointment was "appropriate" - have gathered in front of the ministry in recent weeks.

The ministry on Thursday released to parliament hundreds of pages of what it said were copies of the original documents, but opposition lawmakers said their doubts remained.

Abe's ruling bloc has big majorities in both houses of parliament, so his grip on power appears unlikely to be at risk.

But falling support could complicate his bid for a third term as Liberal Democratic Party leader in a September party vote. Re-election would put him on track to become Japan's longest-serving premier.