Tokyo Governor Yuriko Koike, who is seen by some as a potential prime minister, yesterday quit the ruling Liberal Democratic Party (LDP) to lead her own political group into local assembly elections on July 2.

Ms Koike, 64, formerly Japan's first female defence minister, will now lead her group, Tomin First no Kai (Tokyoites First), into next month's local polls as she seeks to consolidate power in the metropolitan Parliament.

Issues such as a swelling Olympics budget and a fiasco over the proposed relocation of the revered Tsukiji fish market to make way for a major highway are expected to dominate the election.

Local media reports paint a tense assembly dominated by LDP candidates who oppose many of the initiatives proposed by Ms Koike.

"With a sense of urgency, I want to make progress on issues such as the lack of spaces in childcare centres," she said yesterday. "And I want the assembly to have this urgency."

An LDP veteran who has fallen out of favour, Ms Koike failed to win the party's endorsement for the Tokyo gubernatorial elections in July last year, but ran anyway and scored a landslide win against LDP's pick, to become Tokyo's first female governor.

As Tokyo governor - the country's largest directly elected political post - she leads a metropolis thrice the size of Singapore, with a population of about 14 million and an economy as large as Indonesia's.

Her move to leave LDP is widely expected to add brand name recognition to her new party, which has said it will field at least 48 candidates. These candidates attended a political school founded by Ms Koike last year.

Tomin First no Kai plans to form an alliance with opposition parties, including LDP junior coalition partner Komeito, to try to win a majority in the 127-seat assembly. LDP holds 60 seats, while Komeito has 23.

Ms Koike, a former newscaster, enjoys approval ratings of 69 per cent, according to a Yomiuri Shimbun poll last month. This is more than 10 percentage points higher than Prime Minister Shinzo Abe's usual ratings, but below her all-time high of 83 per cent.

Yesterday, she argued that a lack of checks and balances in the LDP-dominated assembly has led to issues such as a ballooning budget for the 2020 Olympics and Paralympics in Tokyo.

On Wednesday, it was announced that a cost review led by Ms Koike has resulted in 115 billion yen (S$1.4 billion) being shaved off the total expected bill. She said: "We'll trim more where possible."