TOKYO, July 10 (Reuters) - A heftier dose of nationalism and stalling on economic reform could be in store if, as many expect, Japanese Prime Minister Shinzo Abe's ruling camp loses a July 29 election.

A big loss for Abe's Liberal Democratic Party (LDP) and its coalition partner could also force him to step down, threatening a return to the short-lived governments of the not-so-distant past and ushering in a period of policy stagnation, analysts say.

"All you can say if the LDP loses really badly is that you are back to the early 1990s' succession of prime ministers, political confusion and games being played that don't leave much energy for policy-making," said Gerry Curtis, a Columbia University professor who specialises in Japanese politics.

With the official campaign to begin on Thursday, Abe is struggling to soothe voter anger over mismanaged pension records and political corruption, and to allay doubts about his leadership after three ministers exited his cabinet -- two by resignation and one by suicide.

A fourth minister is now mired in scandal woes.

A loss would not eject the ruling camp from government, since it retains a huge majority in the more powerful lower chamber.

The LDP and its partner, the New Komeito party, need to win a total of 64 seats to keep their majority in the upper house, where half of the 242 seats are up for grabs. The New Komeito is aiming for 13 seats.

If the coalition wins at least 55 seats, including 45 for the LDP, analysts say the tall, soft-spoken Abe can probably keep his job and craft a majority by wooing independents and lawmakers from a small conservative party or even disaffected members of the main opposition Democratic Party of Japan.

With expectations so low, losing by two or three seats would look almost like victory.

But a big defeat for the ruling camp would make it tough to enact laws and would put pressure on the softspoken, hawkish Abe to resign.

STALLING REFORM?

Some analysts say Abe would try to speed up economic reform to win over younger Democratic lawmakers who share his hawkish views on security and favour market-oriented reforms.

The Democratic Party groups together former LDP lawmakers, one-time Socialists and younger conservatives and its leader, Ichiro Ozawa, suffers from an image as an old-style backroom fixer ill at ease in modern, media-driven politics.

"A loss of the majority for the LDP coalition would likely accelerate reform further, by triggering a splinter group in the DPJ to bolt while PM Abe stays in office," Robert Feldman, Morgan Stanley's chief economist for Japan, wrote in a recent report.

Others, however, are sceptical of such predictions.

"The LDP was never really convinced of the virtue of economic reform," said Koichi Nakano, a Sophia University political science professor, adding that Abe's predecessor, Junichiro Koizumi, was rare in his commitment to an economic reform agenda.

A scenario in which the ruling camp ties up with the People's New Party, a tiny band who left the LDP in 2005 because they opposed Koizumi's plan to privatise the postal system, would spell an even dimmer outlook for market-oriented reforms.

"If he has to ally with the People's New Party, he'll really be weakened, because they are so anti-market and won't go into the coalition without getting their pound of flesh," Curtis said.

"Abe may try to avoid saying anything about economic reform and focus on his nationalist agenda."

ASO IN THE WINGS

Abe, who has won kudos for improving chilly ties with China and has stressed the need for even tighter relations with Tokyo's close ally the United States, has pledged to rewrite the pacifist constitution and boost Japan's global security profile.

He also wants to lead the country out of a "post-World War Two regime" that conservatives argue overemphasised Japan's wartime wrongdoing and stressed individualism at the expense of traditional values such as public service and patriotism.

The 52-year-old Abe has had little scope to pitch that conservative agenda in the runup to the election. But should he keep his job, he could be tempted to tilt further to the right to try to bolster his base among conservative parliamentarians.

"Even if the election appears to be a rejection of Abe's agenda.... It might make the LDP more aggressive," Nakano said.

Outspoken Foreign Minister Taro Aso, 66, who shares many of Abe's views on security, looks to be the frontrunner to take over if Abe resigns.

Whoever takes over, political instability looks likely and a reshuffling of party loyalties possible. Analysts doubt, though, that the ruling camp would see much benefit in calling a snap lower house poll. No general election need be held until 2009.

"They have an absolute majority and they will try to keep it as long as possible," said Toru Umemoto, a foreign-currency strategist who analyses politics at Barclays Capital.