Japan's ruling Democratic Party Secretary-General Ichiro Ozawa attends a news conference at the party headquarters in Tokyo February 1, 2010. Photo: Xinhua

The Tokyo District Public Prosecutors Office decided on Thursday not to seek criminal charges against Ichiro Ozawa, the ruling Democratic Party of Japan secretary-general, due to insufficient evidence regarding allegations he conspired with his aides to falsify annual reports for his Rikuzankai fund management body.

However criminal charges will be sought for Ozawa's former secretary and party lawmaker, Tomohiro Ishikawa, 36, for violating the Political Funds Control Law.

Ishikawa, a House of Representatives member, was arrested last month on suspicion of failing to officially register 400 million yen in a 2004 report of Ozawa's fund body Rikuzankai.

Along with Ishikawa, Mitsutomo Ikeda, 32, who succeeded Ishikawa as Ozawa's secretary, and Takanori Okubo, 48, Ozawa's incumbent secretary were also indicted on Thursday, according to sources close to the investigation.

Okubo is on trial over separate accounting irregularities at Rikuzankai after being indicted without arrest.

Sources close to case said that prosecutors suspect that the unreported 400 million yen included 50 million yen provided by Mizutani Construction Co., a subcontractor on a project to build Isawa Dam in Iwate Prefecture, northern Japan, where Ozawa's constituency is located.

Whilst Ozawa has maintained his innocence to investigators and the public, stating unequivocally that he had no direct involvement in the case and that the 400 million yen used to purchase land in Tokyo's Setagaya Ward, in October 2004, was part of his private assets, Ishikawa on Thursday admitted his involvement.

Ishikawa, who was in charge of accounting at Rikuzankai before being elected to the Diet, told investigators he deliberately did not list the 400 million yen provided by Ozawa in Rikuzankai's fund report, but maintained he did not receive any money from Mizutani Construction Co.

''I sincerely apologize to the public, DPJ supporters and my own supporters over the scandal," said Ishikawa in a statement issued by his lawyer on Thursday evening, adding that he deeply regrets the ''careless judgment'' that has led to his indictment.

Opposition parties including the Liberal Democratic Party, New Komeito party and Your Party submitted to the speaker of the House of Representatives on Thursday a resolution demanding the resignation of Ishikawa.

LDP leader Sadakazu Tanigaki, in addition, said at a press conference that he will demand Ozawa be summoned to the Diet to give a full and transparent account of the scandal and its investigation to lawmakers and the public.

In May 2009, Ozawa stood down from the post of DPJ president as voter support for the party waned over the kingpin's involvement in a previous fundraising scandal involving general contractor Nishimatsu Construction Co.

Allegations of Nishimatsu's shady donations sparked more than a year of investigations into political funding irregularities, including those of Prime Minister Yukio Hatoyama, that have severely marred the image of a ruling coalition who vowed to their electorate before monumentally seizing power from the LDP, that such improprieties, which had plagued their predecessors, were a thing of the past.