TOKYO: Japanese prosecutors have decided not to indict Prime Minister Yukio Hatoyama over the alleged misreporting of millions of dollars in political donations, newspapers reported Thursday.

They plan to indict a former aide to Hatoyama for allegedly cooking the books but not the premier because of a lack of evidence he was involved in the accounting irregularities, the Yomiuri and Nikkei dailies reported.

The centre-left leader, who took power three months ago, hails from a wealthy political family often dubbed "Japan's Kennedys" and has faced accusations that his family wealth helped bankroll his political activities.

News reports, which have varied widely on the amounts involved, said the premier's mother, an heiress to the Bridgestone tyre company, has channelled funds into his political war-chest, partially to avoid inheritance tax.

Hatoyama was set to deny any personal involvement in misreporting the donations in a letter he was to submit to Tokyo prosecutors, who deal with white-collar crime, the reports said.

Speaking outside his Tokyo mansion, Hatoyama confirmed to reporters that he would submit a statement but added that "it hasn't been decided yet if it is going to be today (Thursday)," the Kyodo news agency reported.

The powerful Tokyo prosecutors, who routinely telegraph their actions through media leaks, started investigating before Hatoyama's landslide election win in August whether his aide misreported political funds.

The former secretary, who has not been named, is likely to be indicted next week for violating the political funds control law, reports said.

Hatoyama fired the aide in June, when he was still opposition leader, and admitted to sloppy account-keeping by his political fund-raising body, which had listed as donors dead people as well as people who denied giving money.

The Yomiuri and Asahi dailies said this week that the aide allegedly misreported about 350 million yen (about 3.9 million dollars) in donations.

The Nikkei business daily has put the alleged amount at 400 million yen and said it included funds paid by the premier's 87-year-old mother Yasuko, as well as money from Hatoyama's personal fortune.

Jiji Press has reported that Hatoyama's mother gave 180 million yen annually over five years to the premier and to his younger brother Kunio, a conservative politician and former internal affairs minister.