Ozawa won the leadership election among party members and registered supporters ( tōyū) in December 1995 with 1,120,012 votes against Tsutomu Hata who received 566,998 votes. In 1995, Kaifu was succeeded by Ichirō Ozawa who led the party from 1995 until its dissolution in 1997. On 8 December 1994, the Diet members of the future party elected former LDP Prime Minister Toshiki Kaifu as leader, Kaifu received 131 votes, former Prime Minister Tsutomu Hata 52 and DSP leader Takashi Yonezawa 32 votes. After the electoral reform initiated by the anti-LDP coalition had been passed by the new LDP-JSP coalition in November 1994, the opposition parties negotiated on creating a unified force to contest the newly introduced First-past-the-post voting single-member electoral districts that now elect the majority of the House of Representatives: In December, the Japan Renewal Party, a part of Kōmeitō which had split a few days before, the Democratic Socialist Party (DSP), the Japan New Party and the Jiyū Kaikaku Rengō ("Liberal Reform League" a federation of several small groups of Diet members who had broken away from the LDP) formed the New Frontier Party, becoming the largest single party formed in post-war Japan other than the LDP.
Hata resigned before an impending no-confidence vote submitted by the LDP: In less than a year, the anti-LDP coalition had broken down.
In June, the LDP returned to power by striking a "grand" coalition deal with the JSP under which the Socialists would receive the prime ministership. But at the same time, the Japan Socialist Party (JSP) and the New Party Sakigake withdrew from the eight-party coalition and left Hata without majority. During the formation of the succeeding Hata cabinet, several coalition parties formed a joint parliamentary group.
The party was founded on 10 December 1994 by former member parties of the anti- Liberal Democratic Party (LDP) opposition coalition led by Morihiro Hosokawa who had resigned in April.
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