The issue arises at a delicate time for Abe, who is trying to enact a sweeping change of security policy despite widespread public opposition, and also as outrage grows over ballooning costs for Tokyo's hosting of the Summer Olympic Games in 2020.
Political support groups for Toshiaki Endo, who took up the newly created post of Olympics minister late last month, may have received 5 million yen ($41,000) in donations from four officials in a livestock firm in his political district in 2013, the Sankei Shimbun daily reported on Wednesday.
Endo's office issued a statement denying the report, saying it was "completely groundless" and that a correction and an apology had been demanded. Corporate donations are banned, except to political parties.
"It was a donation from individuals," Endo later told reporters. "It was handled appropriately."
Chief Cabinet Secretary Yoshihide Suga said there would be no political fallout for the Abe government, which saw three ministers resign over the past year over similar allegations, even as it pushes to pass a law enabling Japanese troops to fight overseas for the first time since World War Two.
"This will have absolutely no impact," Suga told a news conference.
Endo took office amid growing outrage over the cost of the new National Stadium, set to replace a now destroyed structure built for the 1964 Olympics, which will cost more than $2 billion, nearly twice the original estimates, and be completed two months later than planned.
Costs for the stadium were confirmed at 252 billion yen at a meeting on Tuesday, compared with 130 billion yen in Tokyo's bid documents for the Games. Tokyo won the bid over Istanbul and Madrid in 2013 largely on a $4.5 billion war chest and Japan's reputation for efficiency.
The stadium has also been slammed for its grandiose design, but Suga reiterated on Wednesday that the government stood by the plans. "Changing things now would damage Japan's international reputation," he said.
($1 = 122.1200 yen)
(Additional reporting by Takashi Umekawa; Editing by Paul Tait)
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