The alleged irregularities have already led to a decision by Prime Minister Fumio Kishida to force four ministers out of his cabinet last month, and whether they will be prosecuted has been the focus for the continuity of the unpopular administration.

Tokyo Public Prosecutors are giving up building criminal cases against recent secretary generals of the Liberal Democratic Party (LDP)'s biggest "Abe faction", including former trade minister Yasutoshi Nishimura and former chief cabinet secretary Hirokazu Matsuno, Mainichi reported, citing a source familiar with the matter.

The investigators have interviewed Nishimura, Matsuno and two other faction bigwigs, but they denied collusion in raising funds and distributing them to faction members without required disclosures, while the faction's accounting staff have admitted the alleged activities and will likely be prosecuted, Mainichi said.

The prosecutors office could not be reached for comment outside business hours. The office previously told Reuters it could not comment on any ongoing investigation. Nishimura and Matsuno have not commented on media reports about their alleged involvement.

Prosecutors will still file criminal cases against three Abe faction lawmakers, including one arrested earlier this month, for allegedly not reporting the money they raised through the faction in the their individual disclosures, Japanese media have said.

Prosecutors suspect the Abe faction and its lawmakers failed to report as much as 600 million yen ($4.14 million) in funds over five years, while the LDP's smaller Nikai faction and its members were believed to have not reported more than 200 million yen, according to media reports.

The Kishida administration's support sank to around 20% of the electorate in mid-December polls, the lowest for any Japanese prime minister in more than a decade.

($1 = 144.9000 yen)

(Reporting by Kantaro Komiya; Editing by David Holmes)