TOKYO (AFP) - A top aide to Japan's opposition leader was indicted Tuesday for violating rules on political funding, according to media reports, in a scandal that has put his boss's job on the line.

Ichiro Ozawa, leader of the Democratic Party of Japan (DPJ) and widely seen as a likely future premier, was due later Tuesday to announce whether he would stay on or quit.

According to the Jiji Press news agency and other media, the Tokyo Public Prosecutors' Office indicted Takanori Okubo, 47, for violating the political funds regulation law.

Earlier Tuesday DPJ secretary general Yukio Hatoyama told senior opposition lawmakers: "Today will be an important day, but we want to unite as a party."

Investigators allege Nishimatsu Construction gave donations through front groups to Ozawa's fund-raising team -- run by Okubo -- in the hope of gaining lucrative public works contracts.

The scandal has damaged both the DPJ and Prime Minister Taro Aso's ruling Liberal Democratic Party (LDP), some of whose lawmakers have also admitted to taking money from Nishimatsu.

The funds scandal has further rocked politics in Japan, which has had four prime ministers in under three years, with the world's second biggest economy already in a recession the government says could be its worst since World War II.

The coalition government led by the unpopular Aso must call elections by September. Voter polls have indicated that Ozawa's DPJ has a better than even chance of ending a half-century of near unbroken LDP rule.