TOKYO - JAPAN'S centre-left Democratic Party and two prospective junior coalition partners failed to strike a deal on Tuesday to form a government following last month?s elections, local media said.

The Democratic Party of Japan (DPJ) and the smaller groups would resume talks on Wednesday to reach compromise on defence policy and issues that touch on the country's wartime history, Jiji Press and national broadcaster NHK said.

The DPJ - which has never been in government - needs the support of the two smaller parties in the upper house, the chamber which can block or stall legislation, despite its large incoming majority in the lower house.

The DPJ's incoming prime minister, Yukio Hatoyama, is set to take over on September 16 from Prime Minister Taro Aso after the DPJ defeated his conservative Liberal Democratic Party in an August 30 election. -- AFP