After the collapse of the Itō administration, Ōkuma became Prime Minister of Japan, despite concerns by Yamagata Aritomo and other members of the Meiji oligarchy and genrō that this would result in a dilution of their authority.
[1] One of Ōkuma's first acts as prime minister was to pass much-needed fiscal retrenchment legislation, trimming the number of bureaucrats on the government payroll.
However, he was unable to curtail spending for the post-First Sino-Japanese War military expansion program he inherited from the Itō administration.
Members of the former Jiyūtō felt that Ōkuma did not distribute the cabinet seats in fair proportion to their party, and joined with Yamagata Aritomo and other conservative elements in the Diet to criticize Minister of Education Ozaki Yukio for a speech which they felt promoted republicanism.
The former Jiyūtō faction reorganized itself into the New Kenseitō in November 1898 with Itagaki as its president, whilst the former Shimpotō members formed Kensei Hontō.