By Linda Sieg

TOKYO (Reuters) - Retired Japanese airline employee Tarou Tanzawa said he hadn't thought much about his own death until his 84-year-old mother was diagnosed with malignant lymphoma and decided against costly and invasive life-prolonging treatment.

He watched his mother die peacefully at a nursing home where she received only palliative care after checking out of the hospital where she was diagnosed.

Soon after, Tanzawa made his own "living will", stipulating he did not want life-prolonging treatment if he became terminally ill or was in a vegetative state.

"I felt it was too soon (for my mother to die) but I also thought 'Ah, there is this way of dying," Tanzawa, now 68, told Reuters. "My generation of baby-boomers ... are reaching old age, and we must confront death as a practical issue."

Although Japan has one of the world's fastest aging populations, the country has no laws regarding "living wills", let alone assisted suicide, which is legal in a few U.S. states such as California and some nations including Canada and Belgium.

Japanese like the Tanzawas with "living wills" are a small minority. But as aging baby-boomers ponder their own demise and the country struggles with the worst public debt among advanced countries due partly to rising expenditure on medical care, the taboo on avoiding life-extending care is eroding.

The topic of "natural death" is increasingly being tackled in TV shows, newspaper and magazine articles and books; seminars on preparing for death are popular; and health experts say the use of feeding tubes for feeble elderly patients is declining.

"I think we are at a turning point in terms of attitudes," said Teruhiko Mashiko, an opposition lawmaker and head of a parliamentarians group set up a decade ago to discuss a law giving legal protection to doctors who withhold life-prolonging care with the patient's consent.

"The view that it is not dignified as a human to simply be kept alive by medical treatment is becoming more common," Mashiko said in an interview.

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"CALLOUS ABANDONMENT"

The lawmakers' group drafted a new version of a bill last year but it has yet to be introduced in parliament, largely because of opposition from disability rights groups who fear it could be a first step toward legalizing euthanasia.

Traditional Japanese views that families are obliged to care for elderly relatives have long been an obstacle to rejecting or withdrawing life-prolonging treatment. Many families fear being accused of callous abandonment, whatever the patient's wishes.

Doctors worry about family members filing suits. Health Ministry guidelines issued in 2007 call for an informed decision by the patient or a proxy and say a decision to withdraw aggressive treatment should be made by a health care team. But these and other guidelines have not erased physicians' concerns.

"We doctors want some guarantee not to be accused criminally or civilly if we stop such treatment," said Toshiharu Furukawa, head of the ruling Liberal Democratic Party's health, welfare and labor panel, and a lawyer-doctor who has treated terminally-ill cancer patients.

The sensitivity of the topic was underscored by the outcry that greeted remarks by Finance Minister Taro Aso in 2013 when he said the ailing elderly should be allowed to "hurry up and die" and linked the issue to the high cost of medical care.

Most advocates of the legal change say respect for individual rights, not cost, is the key factor and legislation would help promote the concept of "living wills".

Others, though acknowledge the role of the fiscal burden.

Japan's total spending on national health care topped 40 trillion yen ($350 billion) for the first time in the year to March 31, 2014.

Spending on those aged 75 and over exceeded a third of the total, a percentage set to grow as the population ages.

"We cannot say clearly that it is a problem of cost, but it is a problem," the LDP's Furukawa said.

Groups representing the handicapped say such talk simply confirms what they fear - public financial woes are driving the push for legislation that could be a first step toward legalizing euthanasia of those society deems a burden.

"They say people want to die in a dignified way ... but because of the cost, they want people to have 'living wills' and reduce medical expenses," said Shoji Nakanishi, president of the non-profit Human Care Association.

"If such a law is passed, it could lead to euthanasia," said Nakanishi, 72, wheel-chair bound since a spinal cord injury at age 21, when he was told he had just three months to live.

Legislation on the right to "die with dignity" is unlikely to be submitted ahead of a national election expected in July since advocates see little upside now in pushing a controversial bill. But some proponents argue that's fine, since delay will allow a changing public consensus to consolidate.

"My parents are nurses, and so is my sister, so we have a lot of debates concerning life and death at home," said Tokyo housewife Chiho Yamaguchi, 27. "We’re already committed that we don’t need to do those kinds of treatments. I personally think ‘dying with dignity’ is fine."

(Additional reporting by Teppei Kasai; Editing by Raju Gopalakrishnan)