With an ailing emperor and a nationalist prime minister whose approval ratings are down to about 20% as the country faces a deep recession, it is a bleak winter for Japanese conservatives.

Japanese commentators are shedding old taboos to question the future of the two dominant national institutions, the imperial house and the Liberal Democratic party. Emperor Akihito, 75, said to be sick with stress over the future of his line, has been suffering from internal bleeding and is still receiving treatment following surgery for prostate cancer in 2003.

Foreign ambassadors were asked to send the emperor new-year messages of greeting instead of paying their usual calls on him, and some of his public engagements were cancelled. “His majesty is quietly enduring mental agony,” admitted the head of his medical team, Dr Ichiro Kanazawa.

The most likely cause is a simmering conflict between Naruhito – the crown prince and heir to the throne – and the tradition-bound courtiers of the Imperial Household Agency. The crown prince and his wife Masako, the crown princess, are an Oxford-educated couple whose admirers predict will transform the image of the Japanese monarchy.

However, Masako has been in seclusion since suffering an apparent nervous breakdown in 2004, and her husband appeared to blame courtiers for having forced an intelligent, outgoing woman to conform to customs of a bygone age.

She was also under intimate scrutiny after giving birth to a daughter, Aiko, but failing to produce a male heir. That traditional requirement has since been fulfilled by Princess Kiko, the wife of the crown prince’s younger brother Akishino, who had a boy last year. However, public controversy over male succession has not gone away.

Last week the emperor felt obliged to reassure the public in his annual message that both he and Empress Michiko support their eldest son and his wife. However, the Japanese press has pounced on an unusually arch comment by the head of the Household Agency, Shingo Hateka, aimed at the crown prince.

Hateka said the emperor and empress were “deeply hurt” by criticism that Masako’s mental stress was caused by the imperial family, and by claims the key to her recovery was to give her worthwhile work to do. Hateka appeared to dismiss talk of reforms of the monarchy suggested by the crown prince, saying: “Even now, we await his concrete proposals.”

By normal Japanese standards of excruciating politeness, this was a put-down. “It was a heavy comment,” an anonymous source told the Asahi Shimbun newspaper, adding: “The crown prince has perhaps been dealt a serious blow.”

In another departure, when Princess Sayako – the emperor’s only daughter – wed Yoshiki Kuroda in 2005, she became the first imperial princess to marry a commoner.

Traditionalists are worried that the twilight of the emperor’s reign and the troubles of the conservative-led government are becoming entwined.

“It is time to debate the succession,” declared the right-leaning Sankei Shimbun newspaper last week, in consideration of the emperor’s health.

The coincidence of a loss of confidence in the established order and the shock of recession means that the unthinkable is now happening in Japan on a daily basis. Toyota is projecting its first annual loss for 70 years, of 150 billion yen (£1.13 billion) for the year to the end of March. Japan’s industries saw their output fall more than 8% last month, and unemployment is almost 4%. Events seem to have stunned the prime minister, Taro Aso, who last week described the situation as “an economic tsunami”.

Aso’s brand of hawkish patriotism, which has always played on warm sentiment about the imperial family, seems no longer to resonate with the voters.

The opposition parties, which already control the upper house of parliament, would sweep to power if elections for the more important lower house were held today. Aso must call those elections by next September.

Despite his cabinet having worked to agree an £81 billion emergency budget to revive the economy, few economists have faith in this, and the main business newspaper, the Nihon Keizai Shimbun, commented: “The measures all smack of panic-spending by a government focused on appeasing taxpayers.”

The premier needs something to ward off the chill, and political reporters say he has taken to visiting the bars of the Okura and Imperial hotels – both renowned for their selection of malt whiskies – every night on his way home.

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