The population has shrunk to less than a tenth of its peak, services are vanishing and white elephant public works projects have left the greying inhabitants with a mountain of debt.

Welcome to Yubari, Japan in miniature.

This once-booming coal town built its wealth supplying the fuel that powered Japan's economic miracle of the 1960s and 70s.

But the switch to oil, followed by the stalling of the national economy as the asset and stock bubbles burst left public finances floundering. Jobs dried up and people started moving away.

Undeterred, the local authorities kept up the lavish public spending that is the hallmark of Japanese bureaucrats, hoping the economy would pick up if they threw enough money at it.

The city built a sprawling amusement park and bought an unprofitable hotel, both of which consistently failed to attract enough tourists.

Then in 2007, things finally snapped and Yubari was declared bankrupt, with debts of 63.2 billion yen ($805-million) — almost $80 000 per inhabitant.

Salaries for some public sector employees were slashed almost in half sending many scurrying for the exits and leaving a much-depleted and very demoralised workforce trying to make ever-shrinking ends meet.

What was once a town of nearly 117 000 people now has a population of just 10 400, spread out over 763 square kilometers. The 23 wards that are home to Tokyo's 9 million people cover 620 square kilometres.

Of those who are left in Yubari, 45 percent are aged 65 or over - high even by the standards of greying Japan -- putting extra strain on medical and social welfare services, while adding little to the tax take.

It was into this fiscal morass that Naomichi Suzuki, now 31, was seconded in 2008 by the Tokyo Metropolitan Government, with the aim of bringing some big city discipline.

His 26-month stint, which saw him going door-to-door to learn about the impact of spending cuts, gathered him a following and shortly after his return to Tokyo, Yubari residents got in touch to ask him to run for mayor.

"I thought hard about it," he recalled. "It was right after I proposed to my wife, and her parents were strongly against my leaving a stable job," he said.

"In the end, I listened to my inner voice and knew that I really wanted to do it."

The bet paid off and in 2011 he was elected for a four-year term.

On Page two... local politicians don't cut their spending accordingly