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By Tetsushi Kajimoto

TOKYO, Feb 16 (Reuters) - Japan's finance minister denied on Monday that he had been drunk at a G7 news conference but the opposition demanded he be fired, piling pressure on unpopular Prime Minister Taro Aso ahead of an election this year.

Asked ahead of a meeting with Aso if he was considering resigning, Shoichi Nakagawa told reporters: 'If I was told to resign, I would.'

Nakagawa, 55, a close ally of Aso, said he had only sipped a little wine at a luncheon before the news conference, which followed a Group of Seven finance leaders meeting in Rome.

But he said he had taken a large amount of cold medicine, which may have affected his performance badly.

The fuss over Nakagawa's behaviour at the news conference comes as Aso's public support is plummeting ahead of an election that must be held no later than October and as the economy sinks deeper into recession.

If Nakagawa is fired or forced to quit, analysts said, it would be a heavy blow to Aso, struggling to keep his own grip on power after a series of gaffes and policy flip-flops.