TOKYO (REUTERS) - Japanese Prime Minister Shinzo Abe's wife has cut ties with an elementary school whose operator is under fire for buying state-owned land at a rock-bottom price in a furore rapidly developing into a political headache for Mr Abe.

Moritomo Gakuen, an educational institution in the western city of Osaka that also operates a kindergarten promoting patriotism based on Japanese traditions and culture, will open an elementary school in April that had been set to have Mrs Akie Abe as honorary principal.

Mr Yasunori Kagoike, who is president of Moritomo Gakuen, heads the Osaka branch of Nippon Kaigi, or Japan Conference, a nationalist lobby group with close ties to the prime minister and his cabinet.

Mr Abe, grilled about the issue in a parliamentary committee on Friday (Feb 24), said his wife had tried to refuse the position of honorary principal but accepted after it was announced in front of parents.

"Despite this, she decided that it would be detrimental for both the students and the parents if she continued and so she told them she would resign," he said.

On the web site of the elementary school, Mrs Abe had said: "I was impressed by Mr Kagoike's passion for education and have assumed the post of honorary principal." But the comments were removed from the website on Thursday. "It is true that she was on the web site as honorary principal but at her request, this was removed,"Mr Abe said.

Mr Abe reiterated that he had declined to allow his name to be used when Moritomo Gakuen solicited donations for what it called the "Abe Shinzo Memorial Elementary School".

He has also denied that either he or his wife had been involved in the school's getting approval or in its acquisition of the state-owned land for school grounds.

Moritomo Gakuen last year bought an 8,770 sq m plot of government-owned land for 134 million yen (S$1.67 million), or 14 per cent of its appraisal price, to build a new elementary school, according to official data.

Officials have said the difference reflected the cost for cleanup of waste at the site.

Finance Minister Taro Aso said in parliament earlier this week that there were no problems with the purchase.

A kindergarten run by the same institution apologised earlier this week for online comments that domestic media described as possible hate speech against Koreans and Chinese people.