The right-hand man of Japan's prime minister has resigned, becoming the most prominent casualty of a pension-fund scandal in the country.

Japan's longest-serving chief cabinet secretary, Yasuo Fukuda, has resigned to take responsibility for not making pension payments. Mr. Fukuda, also the top government spokesman, announced his departure to reporters Friday.

Mr. Fukuda says he has lost the trust of the nation as a result of not paying his pension premiums.

Mr. Fukuda is being replaced by Deputy Chief Cabinet Secretary Hiroyuki Hosoda, a retired trade ministry bureaucrat who is serving his 15th year in parliament.

Prime Minister Junichiro Koizumi has accepted Mr. Fukuda's decision.

The chief cabinet secretary, himself the son of a former prime minister, had been considered one of Mr. Koizumi's most powerful and closest aides. Many political observers here had expected Mr. Fukuda to be a likely successor to Mr. Koizumi as prime minister.

Mr. Fukuda is one of a number of political figures in recent weeks who have admitted not making payments into the national pension scheme. The resignation of Mr. Fukuda could force other prominent politicians out of their posts. Six other members of the Koizumi Cabinet have acknowledged not making pension payments.

Opposition politicians are also feeling the heat. A Communist Party lawmaker has resigned his party post.

And the president of the main opposition party, Naoto Kan of the Democrats, who has confessed to periodically missing pension payments, is not saying what he will do.

Mr. Kan says he believes it is necessary for him to make all-out efforts to reform the pension system in a way that would be beneficial to citizens.

The scandal has further undermined public confidence in the system. Many young people here say - whether or not they make payments - they expect the pension system to go bankrupt before they are able to retire because of the nation's declining birthrate.

An estimated 40 percent of younger Japanese are not making payments.

Legislators have been seeking to gradually increase contributions by one third and cut benefits by about 15 percent. They acknowledge the pension scheme has complicated rules that make it difficult for those changing jobs or entering the workforce to keep accurate track of their status in the system.