When Ryutaro Hashimoto, roundly rebuffed by the Japanese electorate on Sunday, became prime minister in January 1996, it seemed Japan finally had a leader assertive enough to pull the country out of its slump.

With an Elvis-style quiff and a sense of humour that led him to brandish a kendo bamboo sword at US trade representative Micky Kantor, he seemed to be everything his short-lived predecessors were not: a charismatic, combative and dynamic statesman.

In just two-and-a-half years, Mr Hashimoto saw his stock sink among world leaders, international markets and the electorate.

Expectations, perhaps, were always too high. What the world saw as independence and decisiveness came across in Japan as aloofness and arrogance, particularly when he appointed a convicted bribe-taker to his cabinet last September - a mistake from which his ratings never recovered.

Despite his background - a political aristocrat from a family of Liberal Democratic Party politicians - Mr Hashimoto was unable to build his own support base within the ruling party.

As a result, the ambitious administrative reform plans which were to have been the centrepiece of his premiership fell victim to the "shadow shoguns", the faction leaders who pull the strings within the LDP.

His administration was also plagued by scandal. Mr Hashimoto avoided allegations of an affair with a suspected Chinese spy, but his finance minister and the governor of the Bank of Japan were forced to step down after revelations that banks and brokerages had bribed financial inspectors.

The main reason for his unpopularity was the sharp deterioration in the economy, which, according to the latest quarterly data, is contracting at more than 5 per cent per year. Flip-flops on tax reform and a lack of progress on clearing up the banking sector have led to steadily falling share prices, a weakening of the yen and increasingly critical rebukes from Washington.

Mr Hashimoto had some success in foreign affairs, most notably with Russian President Boris Yeltsin towards completion of a second World War peace treaty and a resolution of the thorny issue of the northern territories.

In his maiden speech up taking office, Mr Hashimoto, who has also been finance and trade and industry minister, recognised the challenge, saying: "The most crucial task facing this government is to revive the economy." His failure to live up to this challenge cost him dear.

With no successor obvious, a factional battle is in prospect between nationalist hawks and the moderates who pulled the LDP back into power by forming a coalition with its former ideological opponents, the Social Democratic Party (SDP).

The 71-year-old Foreign Minister, Keizo Obuchi, is favourite to succeed Mr Hashimoto. As head of the LDP's biggest faction, he has the power base needed to push through legislation.

But the popular perception is that he is a colourless politician controlled by the former prime minister and LDP kingmaker, Noboru Takeshita. This lack of charisma could count against him as the LDP seeks support before a general election, which some analysts say could be called as early as next year. Another contender is Koichi Kato (59), who has been in the political limelight for most of the past two years as the prime minister's righthand man. A Harvard-educated former diplomat, Mr Kato was a key player in the LDP's decision to ally with the SDP to form a government in 1994. As party secretary-general, he has since been credited with restoring the LDP's majority in the powerful lower house.

But he has no experience in any of the main cabinet posts and his proximity to Mr Hashimoto means he will find it difficult to evade responsibility for the election debacle.

Such criticism is certain from members of the nationalist wing, whose leaders include Seiroku Kajiyama, known as the vice-shogun of Japanese politics. As an architect of the government's 30 trillion yen (£150 billion) financial stabilisation package, Mr Kajiyama (70) may win support as the man best equipped to deal with the economic crisis.

But he would be viewed with alarm by Washington, where he caused a row by comparing black people to prostitutes, and by China, where he has been condemned for trying to whitewash the Japanese army's sexual subjugation of local women during the second World War.