Osaka Ishin no Kai (One Osaka), a local political group that is part of Nippon Ishin no Kai (Japan Restoration Party), has lost its majority in the Osaka Prefectural Assembly after four members were expelled Monday for voting against the group’s proposal to privatize a local railway.

The loss of the majority dealt a fresh political blow to Osaka Mayor and Nippon Ishin co-leader Toru Hashimoto and Osaka Gov. and party Secretary-General Ichiro Matsui.

Wracked by internal dissent and plummeting popularity, the fundamental party goal of merging the city and prefecture appears more distant than ever.

In an attempt to privatize prefectural assets, Matsui and Osaka Ishin pushed a proposal to sell the Senboku Rapid Railway, which runs through southern Sakai, to Lone Star Funds, an American private equity firm.

Citing concerns that the proposal wouldn’t result in lower fares, four Osaka Ishin members joined the Liberal Democratic Party, New Komeito and other parties to vote it down. The dissenting members were then kicked out of Osaka Ishin.

Hashimoto insisted the expulsions won’t have a major impact on Osaka Ishin. He urged prefectural party members to cooperate with New Komeito. In the municipal assembly, New Komeito and Osaka Ishin form the majority.

“We should work with New Komeito, which is the second-largest party in the prefectural assembly, to advance the privatization proposal again,” Hashimoto told reporters after the vote.

Osaka Ishin plans to hold a prefectural referendum on the issue by next autumn, but the prefectural and municipal assemblies must first pass a resolution authorizing such a vote.

Despite Hashimoto’s calls to work with them, New Komeito has been distancing itself from Osaka Ishin since Hashimoto tied up with Shintaro Ishihara to form Nippon Ishin prior to last year’s Lower House election.

New Komeito is also increasingly skeptical of the merger plan and lately has been voting against various other Osaka Ishin proposals in the municipal assembly.

The loss of the prefectural assembly may also accelerate defections by Nippon Ishin Diet members or finally split the party, which is sharply divided between the Ishihara faction and the Hashimoto-Matsui faction and is already seen as little more than an extreme right wing of the LDP.

On Tuesday, Hideo Higashikokubaru, who has left Nippon Ishin, also submitted his resignation as a Lower House member.