Japanese Prime Minister Shinzo Abe has agreed to be grilled by the opposition in the Diet over an unrelenting cronyism scandal that has sunk support ratings for his Cabinet to new lows.

His U-turn came on Thursday, after weeks of flatly rejecting opposition demands while stressing his innocence. He is alleged to have pulled strings to help a close friend win approval for a new school.

The scandal has jeopardised Mr Abe's once-firm grip on power, and public distrust has grown towards the Prime Minister and his Liberal Democratic Party (LDP) over what is seen as evasiveness.

Local media reports have painted an LDP in disarray, as separate factions jostle for power in the hopes of capitalising on Mr Abe's waning political fortunes.

Yesterday, Chief Cabinet Secretary Yoshihide Suga insisted that Mr Abe's decision to testify had "nothing to do" with his sinking support. Rather, he said, it was for the sake of accountability and to clear the air over any lingering doubts.

The volte-face came late on Thursday, after the party had on the same day rebuffed another request by the main opposition Democratic Party for a Diet inquiry.

The Diet, which closed on June 18, will reopen for a special session that could take place as early as next week, LDP Diet affairs chief Wataru Takeshita said.

The scandal has evolved into Mr Abe's biggest crisis in his 41/2 years in power, and he is also eyeing a Cabinet shake-up next month to win back public trust.

His moves come after the LDP was routed by an upstart party in the Tokyo assembly election earlier this month, winning just 23 seats. More than half of its original 57 lawmakers were ousted.

That led Mr Abe to pledge "every effort" to regain public trust. But this has not been forthcoming, domestic media said in editorials this week, noting that the government has not given a proper account of itself that is backed by evidence.

Opinion polls last weekend all showed a plunge in support for Mr Abe's Cabinet. A poll by the Jiji news agency, released yesterday, showed support falling 15.2 points from last month to 29.9 per cent. Separate polls by public broadcaster NHK, the right-leaning Yomiuri Shimbun and the left-leaning Asahi Shimbun indicated support at between 33 per cent and 36 per cent.

University of Tokyo political watcher Yu Uchiyama told The Straits Times: "Despite the official denial that the declining ratings altered Mr Abe's decision, it is clear Mr Abe had no choice. If he continues to reject the opposition's requests, even more people will suppose that he is hiding something."

The LDP agreed to a special Diet session on Monday, but that was in Mr Abe's absence. At the session, the party sought to discredit Mr Kihei Maekawa, the top bureaucrat who came forward with the allegations, by taking potshots at him.

Mr Abe is also said to be looking at sweeping changes to the Cabinet next month to shore up support by appointing promising young politicians to key posts. But he is still expected to keep his key allies.

Questions, however, are swirling over whether Foreign Minister Fumio Kishida, who heads a different faction in the LDP from Mr Abe, would stay on in a role he has held since 2012. Mr Kishida, who is eyeing the prime minister role, is said to want to leave his post.

Dr Uchiyama noted that until a few months ago, Mr Abe was so entrenched in power that few politicians tried to challenge him.

"Mr Kishida was obedient to Mr Abe, but some young politicians in his faction have been dissatisfied with the situation," he said. "Their voices are getting louder now."

Research fellow Ippeita Nishida of think-tank Sasakawa Peace Foundation said Mr Abe may need support from other LDP factions in his Cabinet reshuffle. He said: "Mr Kishida may try to exploit this by lobbying for his factional aides to take on key leadership roles in the Cabinet so they can gain political experience."