THE shock defeat of the political reform bills sponsored by the coalition Government led by Japanese Prime Minister Morihiro Hosokawa does not necessarily mean the bills are now dead. But his seven-party coalition certainly stands politically diminished as a result of the defeat and will probably break up, if Mr Hosokawa is forced by events to call a snap general election. It is also likely that events may now hasten the day when the two major political parties which have dominated Japanese politics since 1955, the Liberal Democratic Party (LDP) and the Japan Socialist Party begin to disintegrate. The 130 to 118 margin in the upper House of Councillors against the four political reform bills, which would drastically change the Japanese electoral system, was larger than expected. Crucially, more Socialists members of the coalition crossed the floorto vote against the bills than LDP members crossing the floor in the reverse direction to vote for them. There are two ways now left open to the coalition if it is to get the legislation passed. One way would be to return the four bills to the lower House of Representatives. Under Article 59 (2) of the constitution the bills would become law if passed againthere by a two-thirds majority. But there seems little likelihood that the coalition, which only has a small majority and which is further rent by yesterday's Socialist defections, would be able to radically increase its majority to this extent. The other way would be to set up a special Joint Committee of the two Houses, under Article 59 (3) of the constitution, empowered to work out a compromise. The committee would have to pass whatever compromise legislation was agreed by a two-thirds majority. Then the bills would go back to both Houses for passage by simple majorities. The indications are that the coalition has chosen to try this option but the main restraint is time. The present Diet session has already been extended to the maximum permissible limit. It must end on January 29. The coalition Government has been trying since mid-September to reach consensus with the LDP on political reform, and has failed. There seems a basis for believing it would now succeed in doing so in the next few days. Apart from anything else, the LDP, under its leader Yohei Kono is likely to demand compromises which Mr Hosokawa's coalition could only accept at the cost of its previous convictions. One key LDP demand has all along been that the legislation must permit continued corporate donations to individual politicians. As of now, the reform bills will compel corporate donations to be made to political parties only. On the other hand, there is a considerable body of LDP members, who look to former Premier Toshiki Kaifu for leadership on the reform issue, and who would like the party to be more supportive of the legislation. If these members, and particularly Mr Kaifu, are now more assertive in the reformist cause, it is possible that a meaningful compromise might emerge. The more likely assumption must be that the coalition and the LDP will not achieve in eight days the consensus that has eluded them in the past eight months. If this is what happens, then at the end of the month Prime Minister Hosokawa will again be faced with the decision as to whether or not he calls a snap election. Given the emphasis he has placed upon securing political reform, Mr Hosokawa can hardly do other than dissolve the Lower House. But he knows that an election under the old electoral system, held amid the continuing deep recession in Japan, could be ruinous for the three reformist parties which form the backbone of the coalition. One lingering hope for Mr Hosokawa is that the process quickly gathers momentum and that both the LDP and the Socialists, the two major parties in the post-war Japanese political system, break up. Yesterday's vote clearly showed that the process of disintegration is under way. Political reform is popular with the electorate. The die-hard opposition to the reforms by the LDP and the left-wing Socialists will not gain either party increased support.