A reform panel of the ruling Liberal Democratic Party will propose the introduction of a system enabling the party to request that a faction disband if it is found to have violated the political funds control law, sources close to the matter said Monday.
In its interim report, expected to be released later this week, the panel will also recommend that the party toughen its penalties for lawmakers in the event of arrest or indictment for violating the same law, according to the sources.
Under the new system, offenders would face party punishment even when their accountants are arrested or indicted, the sources added.
The LDP has come under intense scrutiny over the fundraising scandal, with some factions allegedly having failed to report revenue from fundraising parties over many years. Public outrage has led to a significant decline in approval ratings for Prime Minister Fumio Kishida's Cabinet.
The proposals come after some factions within the LDP, including the largest one formerly headed by the late former Prime Minister Shinzo Abe and a group that Kishida led until December, decided last week to dissolve over the scandal.
Earlier this month, Kishida, who quit his group in response to the slush funds scandal, launched the internal reform panel to establish rules to enhance the transparency of funds raised by LDP factions, saying the public views them with "skeptical eyes."
On Friday, prosecutors indicted a number of accountants and lawmakers from some LDP factions on suspicion of failing to report political funds. However, they did not indict the executives of the groups due to a lack of evidence.