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Junichiro Koizumi’s maverick five-year reign over Japanese politics will effectively end tomorrow, heavily overshadowed by a darkening scandal involving Toshihiko Fukui, the Governor of the Bank of Japan.

Mr Fukui is a close supporter of the reformist agenda pursued by Mr Koizumi who takes his seat in the Diet as Prime Minister for the final time tomorrow.

Mr Koizumi will technically remain in power until September. But with just hours left to run in the final parliamentary session before the autumn, the populist Prime Minister will leave the plush Lower House debating chamber for the last time with his most controversial Bills un-passed, a deepening gulf between reformers and conservatives, and a political legacy in turmoil.

The central bank Governor is under attack for a £47,000 investment six years ago in a fund that was, this month, discovered to have engaged in insider trading. Although Mr Fukui has broken no official rules, he is accused of allowing a conflict of interest to persist. Analysts say that the scandal could lead to the central bank being stripped of some of its hard-won independence amid increasingly outspoken calls for the Governor’s resignation.

The closing months of the Koizumi era have already seen two financial scandals erupt: the forced appearance of the Bank of Japan’s Governor before the Lower House tomorrow, will, for many, symbolise the dark side of Mr Koizumi’s Western-inspired market-led reforms.

Despite his continuing popularity in the polls, close confidants of the Prime Minister have described his recent attitude as "distanced", and his old reformist urges deflated.

Mr Koizumi told an audience of foreign business leaders today: "I feel very relaxed because at last I am done with fielding questions in the Diet. I think that no prime minister in the world has to respond to so many questions as the Japanese Prime Minister."

He later revealed privately to The Times that, once released from the burdens of parliamentary sessions, he would spend his spare time listening to classical music, enjoying the ballads of his beloved Elvis Presley, and watching Japan’s fortunes closely in the World Cup.

Although he will not officially step down until the ruling Liberal Democratic Party’s internal leadership election in late September, his last day in parliament, say senior political commentators, will serve to highlight his failure as a reformer, letting slip the last chance to use his popular mandate to push through big-ticket reform.

The current Diet session will therefore not have time to debate a hugely significant first revision to the 1947 Fundamental Law of Education. It will not have time to debate a Bill that would convert the Defence Agency into a fully fledged government ministry. It will not be able to squeeze in what might have been Koizumi’s most impressive legacy: a Bill that would actually allow parliament to make revisions to the Constitution.

According to Minoru Morita, Japan’s best-known political scientist, Mr Koizumi has succeeded, as promised, in preparing the sprawling Japanese postal system for privatisation in about a decade’s time. His structural reforms have pulled Japan’s biggest companies out of trouble but are widely criticised for ignoring smaller businesses. Beyond that, his attempt to privatise the Japan Public Highway Corporation has foundered and other reforms remain on the drawing board.

Whether he has achieved any lasting success in his avowed attempt to break up the factions that used to control the LDP will be made clear after he is gone and at the September leadership elections. Many fear a swift return to the pre-Koizumi norms.

"Koizumi’s reforms have succeeded in Tokyo and part of Nagoya, but failed in other parts of Japan," said Mr Morita. "His reforms were only concentrated on urban areas, but disregarded the regions, creating a widening economic gap between the haves and the have-nots. Economic reform has failed — only large enterprises like the mega banks have enjoyed big profits and small and medium companies have not benefited at all."

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