PRIME Minister Morihiro Hosokawa yesterday made the strongest statement of apology ever presented by a Japanese leader in a policy speech on his country's role before and during World War II. Yet at the same time Mr Hosokawa diluted - and was seen to back away from - the frank statements he had already made on the still-sensitive issue. Making his first policy speech to the House of Representatives yesterday, Mr Hosokawa recalled that ''August is a month that Japan will never forget . . . it was with the end of the war in August 1945 that we realised the great mistake we had made, and vowed to start anew, resolutely determined never to repeat the wrongs of the past''. ''I believe it is important at this juncture that we state clearly before all the world our remorse at our past history and our renewed determination to do better,'' he said. ''I would thus like to take this opportunity to express anew our profound remorse and apologies for the fact that past Japanese actions, including aggression and colonial rule, caused unbearable suffering and sorrow for so many people, and to state that we will demonstrate our new determination by contributing more than ever before to world peace.'' It was the first time anyone could remember an apology for Japanese colonialism. On previous occasions, prime ministers have expressed themselves much less directly on the issue of aggression. Former prime minister Noboru Takeshita once told the Lower House that it was ''impossible to deny the facts of actions resembling aggression''. Mr Hosokawa's predecessor, Kiichi Miyazawa, once said: ''It is easy to say that, according to common sense, it was aggression. I am not denying that commonsense.'' Compared with these statements, Mr Hosokawa was forthright. As one official said immediately after the speech: ''The remarks were the most candid ever used by a Japanese prime minister in a maiden policy speech in the Diet.'' Yet Mr Hosokawa will clearly be seen to have backed away from a frank comment, made at his initial prime ministerial press conference two weeks ago, that ''I myself believe that [the Pacific war] was a war of aggression, a war that was wrong''. This statement immediately aroused a backlash of adverse comment, to which Mr Hosokawa was clearly responding in his statement yesterday. Thus, on August 19 and 20, all major Japanese newspapers carried reports informing readers the expression ''war of aggression'' would not be used in yesterday's policy speech. Curiously, none of these reports appeared in the English-language press here. The Japanese-language press reports also indicated Mr Hosokawa would talk about there being ''some aggressive acts'' but would not use the word apology. So clearly, there has been a bureaucratic battle between Mr Hosokawa and officials, with the new Prime Minister not doing exactly what the officials wanted. A strong element in the backlash against his earlier comments came from family associations for those killed during the wars Japan fought from 1931 until 1945, for whom ''war of aggression'' means their relatives died in an unjust cause. Responding to this outcry, Mr Hosokawa said yesterday, somewhat incongruously, prior to expressing his apology, that the peace and prosperity enjoyed by Japan today ''rests upon the supreme sacrifices made during the war''. Another reaction to Mr Hosokawa's earlier comments, mainly among officials and some politicians, was that too much apology would only serve to resurrect the issue of reparations and compensation. China last night praised Mr Hosokawa for his ''correct attitude'' towards the suffering Japan inflicted during the war. Japanese Foreign Minister Tsutomu Hata is considering visiting southeast Asian countries to convey Japan's apology for its wartime aggression, Kyodo news agency reported.