(For more on Japan's new government click ID:nPOLJP])
* Japan's Fujii in lead for finance minister-Yomiuri
* Kyodo says Naoshima may be chosen as finance minister
* Hatoyama says to start choosing cabinet Tuesday
* Coalition partners may get defense, consumer posts-paper (Updates with conflicting reports on likely appointment)
By Chisa Fujioka
TOKYO, Sept 14 (Reuters) - Japan's leader-to-be Yukio Hatoyama is likely to appoint veteran lawmaker Hirohisa Fujii as the next finance minister, the Yomiuri Shimbun reported, although another report said he may instead choose his party's policy chief, Masayuki Naoshima, for the key post.
Fujii, who briefly served as finance minister in the 1990s, is known as a fiscal conservative and his appointment would likely be welcomed by markets worried about Japan's ballooning public debt as the country struggles out of recession.
Kyodo news agency, however, earlier reported that Hatoyama may choose Naoshima. One newspaper separately reported Fujii might be facing opposition from the Democrats' powerful former leader, Ichiro Ozawa, saying it was a sign Hatoyama might have trouble controlling the party after taking office this week. [ID:nT373564] [ID:nT117581]
Naoshima's views on monetary policy are not widely known, although he has said the Democratic Party's plans for family subsidies and abolishing highway tolls could be funded by tapping reserves and cutting waste in other areas.
Japan's Ministry of Finance is generally seen as one of the country's most powerful ministries, overseeing currency and fiscal policy.
Hatoyama said he would begin choosing ministers on Tuesday after a meeting of all the party's lawmakers. Some analysts shrugged off media suggestions that he would be controlled by his predecessor.
"It's entertaining to talk about Ozawa doing everything, but I don't think it's a big worry," said Yasunori Sone of Keio University.
Yomiuri, without citing sources, said Naoshima is sure to take on a role in the new cabinet but was likely to become the new minister of economy, trade and industry.
CUT WASTE TO FUND SPENDING
Kyodo, citing Democratic Party officials, said Naoshima had been almost certain to become economy, trade and industry minister but may take up the post of finance minister instead.
Asahi TV said Fujii might instead be given the post of deputy cabinet secretary, which would allow him to use his experience to support the prime minister.
The Democrats' two tiny coalition partners are set to get a post apiece in the new cabinet, media reports say.
Shizuka Kamei of the conservative People's New Party may be handed the defense portfolio and Mizuho Fukushima of the Social Democrats may be given roles responsible for policies to raise the birthrate and protect consumers, the Asahi newspaper said.
Naoshima, an upper house lawmaker and a former motor industry union official, has said the Democrats' spending plans could be funded by tapping government reserves and cutting waste, an idea dismissed by critics who say the reserves would quickly dry up. [ID:nT57466]
Naoshima said in July that the party's policies would raise economic growth by two percentage points in the fiscal year from April 2012.
Hatoyama's Democratic Party of Japan (DPJ) beat the Liberal Democratic Party in an election late last month, ousting the conservatives for only the second time in their 54-year history.
He is set to be voted in as prime minister in a special parliamentary session on Wednesday.
Ozawa, whom Hatoyama has already said he will appoint No. 2 in the party, is widely credited with engineering the election victory. Some have expressed concern that he could become a rival power center to the cabinet, muddling policymaking.
Dubbed the "shadow shogun," Ozawa was forced to step down as leader in May over a funding scandal, which could taint the new government's image. (Additional reporting by Ritsuko Ando in New York; Leika Kihara, Isabel Reynolds and Hideyuki Sano in Tokyo; Editing by Rodney Joyce, Ron Popeski and Todd Eastham)