* Opposition Democrats to stress stronger security system
* Democrats still have shot at winning election - lawmaker
* Democratic leader Ozawa may have to decide fate soon
TOKYO, April 1 - Japan's opposition Democratic Party will pitch a "Human New Deal" to bolster the social security system in an election this year, a possible contender to replace the party's struggling leader said on Wednesday.
Yoshihiko Noda, 51, said the Democrats still had a good shot at ousting the conservative Liberal Democratic Party even though the party's earlier healthy lead in opinion polls has slipped after a funding scandal ensnared a key aide of party leader Ichiro Ozawa.
The Democrats had looked set to oust the LDP in the election, due by October, until Ozawa's aide was charged with illegal fundraising this month.
An opposition win would end almost six decades of nearly unbroken LDP rule and usher in a government pledged to reduce bureaucrats' grip on policy-making, eliminate wasteful spending and stress consumer and worker rights over corporate interests.
Speculation is simmering that unpopular Prime Minister Taro Aso might call a snap election as early as May to take advantage of the Democrats' woes after unveiling a new stimulus package to help rescue an economy in its deepest recession since World War Two.
Noda said the Democrats would be able to agree with at least some of the government short-term proposals, but would focus more on improving the social security system including pension, medical and elder-care systems creaking under Japan's ageing population.
"Both sides are becoming similar in stressing the environment, but where the Democrats want to put more emphasis is on a "Human New Deal", on social security," he said.
But Noda said that stance might change if a new leader took over. "If Mr Ozawa stays on, the manifesto won't refer to the sales tax but if there is a new leader ... it may be mentioned," he said. Aso says the sales tax will need to be raised but only after the economy recovers.
The main opposition party still has an edge in most surveys after the scandal but its declining popularity has clouded chances for a breakthrough in the political deadlock that has stymied policies as Japan's recession deepens.
Ozawa has denied wrongdoing but said he would decide whether to resign depending on whether the scandal looked likely to endanger a Democratic Party victory in the election.
Noda said Ozawa might decide this month after seeing the results of an election survey planned by the party, and that voter support could rebound if the veteran leader stepped down.
"Support for the party itself is not sinking rapidly," he said. "If a new leader who can convince those voters who are trying to make a considered decision emerges, I think we can recover our support."
Noda added he had not made up his mind whether to throw his hat in the ring if Ozawa quits. Former party leader Katsuya Okada is seen as the frontrunner to take over.