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By Linda Sieg

TOKYO, June 11 (Reuters) - Japan's unpopular prime minister, Yasuo Fukuda, faces an unprecedented censure in parliament's upper house on Wednesday, but the embarrassing opposition move is not expected to force him either to resign or call a snap poll.

The opposition Democratic Party and smaller allies were expected to approve the non-binding censure motion, the first against a prime minister under the 1947 constitution, as part of a strategy to build momentum for an early lower house election.

No election for the powerful chamber need be held until September 2009, but Democratic Party leader Ichiro Ozawa has made no secret of his desire to force an early poll in the hope of ousting Fukuda's conservative Liberal Democratic Party (LDP), which has ruled Japan for most of the past six decades.

"I feel that he lacks the capability to be in charge," Ozawa told reporters on Tuesday. "Fundamentally, his only option is to seek the will of the people by calling a snap election," Japanese media quoted him as saying.

Fukuda's support rates have sunk to below 20 percent in some surveys on doubts about his ability to cope with a divided parliament. The opposition controls the upper house and has delayed legislation and blocked key appointments, including the government's first and second choices for Bank of Japan governor.

ELDERLY OUTRAGE

But the 71-year-old leader, a moderate known for favouring closer ties with Asian neighbours, has already indicated that he has no plan to step down as a result of the censure, which, unlike a lower house no-confidence motion, has no legal clout.

On Monday he told a news conference that his first priority was to deal with policy issues rather than call a snap election. Ruling bloc lawmakers are reluctant to risk an election that could well see them lose the two-thirds majority that allows them to override upper house vetoes, if not their grip on power.

Japanese media said the ruling bloc was likely to counter the censure with a vote of confidence for Fukuda in the lower house.

Speculation persists, however, that Fukuda might step down after hosting a July 7-9 Group of Eight summit in northern Japan or that the LDP may decide to replace him with former Foreign Minister Taro Aso or some other more potentially popular rival, perhaps later this year or early in 2009.

Wednesday's censure motion was expected to target Fukuda for the introduction of an unpopular medical insurance scheme that forces some people aged 75 and over to pay more for health care and automatically deducts premiums from their pensions.

The confusing new system outraged many elderly voters, long a core constituency of the LDP. The ruling bloc is now scurrying to make changes to the plan, but insists it will keep its basic outline. The Democrats want to abolish the scheme entirely.

No censure motion has been adopted against a prime minister under the post-World War Two constitution, but in 1998 then Defence Minister Fukushiro Nukaga -- who now holds the finance minister portfolio -- was forced to resign about a month after the upper house approved a censure motion against him. (Editing by Alex Richardson)

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