Japanese lawmakers endorsed the acting Bank of Japan chief as its governor Wednesday, ending a power vacuum at the central bank’s helm by approving the government’s third candidate for the job.

But the opposition-controlled upper house of parliament rejected a former Finance Ministry bureaucrat as one of the central bank’s deputy governors, prolonging a dispute that has turned into a major embarrassment for the scandal-battered administration of Prime Minister Yasuo Fukuda.

It could turn into a liability amid the growing global worries over an economic slowdown, soaring fuel and commodity prices, volatile stock markets and the credit crisis in the U.S., Japan’s major export partner.

A stalemate over who should head the Bank of Japan had festered for weeks as the opposition turned the decision into a political issue. The five-year term of former Bank of Japan chief Toshihiko Fukui expired March 19.

The opposition, led by the Democrats, said former bureaucrats at the powerful Finance Ministry were too politically connected and could endanger the independence of the central bank of the world’s second largest economy. They voted down two previous candidates for the top job for that reason.

In the latest balloting, shown live on the Internet, the upper house approved Masaaki Shirakawa, now interim governor of the Bank of Japan, to permanently take that seat 231-7. But it voted down nominee Hiroshi Watanabe 121-115 as one of two deputy governors.

The top government spokesman said he was unhappy with the battle over the deputy.

“We can’t come up with an alternative so quickly, so it’s inevitable the deputy’s post will be vacant for a while,” Chief Cabinet Secretary Nobutaka Machimura said on nationally televised news.

Nominations for the posts need approval from both houses of parliament. Watanabe, former vice finance minister for international affairs, was knocked out of the running by his rejection in the upper house.

The ruling coalition controls the lower house, and so Shirakawa, appointed by the prime minister, easily gained approval there.

The vacancies at the central bank are the latest troubles for Fukuda, who has seen his approval ratings sag over a number of scandals, including millions of missing pension records and a criminal investigation of several defense officials.

But the government has been eager to resolve the bank dispute before a Group of Seven financial chiefs’ meeting Friday in Washington, D.C., so Japan will have a governor to send to the meeting.

Separately, the Bank of Japan kept its key interest rate steady at 0.5 percent at a policy board meeting without a governor for the first time in modern Japanese history. The board voted unanimously to keep the rate unchanged.

In a lower house hearing Tuesday, Shirakawa said he would maintain the bank’s independence and transparency.

“The vacancy of the governor post is clearly an abnormal situation that must be resolved urgently,” said Shirakawa, whose nomination as deputy governor was approved by lawmakers last month.

“I’m determined to devote my heart and soul to fulfill the duty as governor if I can only get your approval,” he said.