By David Chance

SEOUL (Reuters) - A 59-year old woman who once dubbed her tough economic policies "Korean Thatcherism" is now sketching out a vision of a more caring society as she aims to take the South Korean presidency her father held for 18 years until he was assassinated.

Park Geun-hye, the daughter of Park Chung-hee, an iron-fisted ruler often called the founder of modern South Korea, once said she might "choose death over a life like this again" after first her mother and then her father were gunned down.

Park has dominated polls in South Korea for more than three years despite losing her bid to be the now-ruling conservative Grand National Party's presidential candidate in 2007 when she had been the initial favorite after redeeming the corruption-tainted party from the political wilderness.

With the next presidential election in 2012, she is the favorite but needs to win over voters increasingly worried over rising living costs, the lack of a social safety net and darkening prospects for Asia's fourth-largest economy.

"At the beginning of the year only about 30 percent of the respondents in a poll believed that our economy was turning down but now that number has almost doubled to 56 percent," said Jeong Han-wool, executive director and a polling specialist the East Asia Institute, a leading thinktank in Seoul.

"Looking at this shift in polls, Park has made an assessment that without changing her welfare policy to one of expansion, she won't be able to increase her approval rating."

A conservative and an intensely private single woman in a country where the political and business elite is male-dominated, Park has now proclaimed herself to be the standard-bearer of "Korean-style welfare" in her second bid for the presidency.

Park styles herself as a person of "trust" and "principle" who emerged from the "misery" that followed her parents' deaths to become a politician during the 1997 Asian financial crisis so as to help alleviate "the hardship that hit my country."

While Park's approval ratings have been consistently almost triple those of her rivals, and stood at 32 percent in September according to the East Asia Institute. The number of undecided voters has also remained stubbornly high at 20 percent.

In September, Ahn Cheol-soo, a well-known software entrepreneur who had not even declared an interest in running, suddenly racked up 20 percent support, indicating Park had failed to reach beyond her core conservative base.

Critics on the left and right say that "Korean-style welfare," which Park sees as providing tailored social services for each stage of life, is vague and uncosted.

At present, South Korea spends just 7.5 percent of its gross domestic product (GDP) on welfare, far less than the 20 percent average in the rich nations club of the Organization for Economic Co-operation and Development.

Park insists she will stick to her conservative fiscal principles by cutting discretionary spending outside of welfare by 10 percent and slashing big ticket items, many of which have been championed by her conservative rival and incumbent President Lee Myung-bak, whose mandatory single term ends in 2012.

"We need to properly outline a program that is strongly linked with both employment and welfare to reinstate the route between growth, employment and welfare," Park said recently.

But anyone who is expecting a dramatic shift to a European-style cradle-to-grave social safety net is likely to be disappointed.

"This should not be simple charity, I believe each individual should receive support so they can cultivate their own talents in generating GDP," Park said in a 2009 address at Stanford University.

TALKING TO THE NORTH?

If Park does manage to win the presidency ahead of a fractured center and left, she will also have to deal with nuclear-armed North Korea, which remains technically at war with the South after an armistice ended the Korean War in 1953.

Park may end up taking office at the same time as leadership changes in the United States - South Korea's main military and diplomatic ally - and China, which backs the North.

She described Seoul's alliance with Washington as "forged in blood" but has reached out to the North in the past and in 2002 met Kim Jong-il, whose father ordered the assassination attempt on Park Chung-hee that claimed Park's mother's life in 1974.

Park Chung-hee survived at least two North-inspired assassination attempts, but was killed in 1979 by his intelligence chief.

"Truthfully, North Korea murdered my mother and gave painful memories... (but) the future of North and South Korea were more important than my personal pain and anguish," she wrote of her visit to the North.

"If North Korea takes steps toward genuine reconciliation, such as reaffirming its commitment to existing agreements, then the South should match its efforts," she wrote.

However, for all the reported warmth of the meeting with Kim, it was all gone by 2006 as relations deteriorated, the North readied its first nuclear test and Park embarked on her first failed bid to become her party's presidential candidate.

"In order not to follow the tragic footsteps of her father... (Park) should keep quiet and move away from the spotlight," North Korean state media warned, according to reports in the South.

(Additional reporting by Iktae Park and Yoo Choonsik; Editing by Raju Gopalakrishnan)