Japan looking at taking control of nuclear power

Japan's government is considering taking control of the nation's nuclear power plants away from private utilities, in a bid to improve accountability of the industry, the Yomiuri newspaper reported on Friday.

The move comes as Tokyo Electric Power Co has fallen under criticism for its handling of the crisis at the Fukushima Daiichi nuclear plant triggered by the devastating earthquake and tsunami in March last year.

"Japan should avoid a situation where private companies own nuclear power facilities and only enjoy the benefits (of low running costs) when the state takes care of compensation and decontamination arising from nuclear accidents," Trade Minister Yukio Edano, who oversees energy policy, was quoted as telling the paper.

Edano also said the government must reach a clear decision on whether private companies should pay massive insurance fees and operate nuclear power facilities or hand over the benefits to the state, which also would take on the risks of nuclear accidents, according to the paper.

As Tokyo Electric, better known as Tepco, faces massive compensation from the world's worst nuclear crisis in 25 years, the government has set up a bailout body for payment assistance.

But with the firm's future still in doubt due to additional burdens of decommissioning the crippled reactors, the government may also inject about $13 billion into the company as early as the summer, effectively nationalising it.

Edano reiterated that it was highly likely Tepco would be put under a state control but that he did not see it as a permanent move as private firms should basically be responsible for supplying electricity, the Yomiuri said.

The trade ministry is set to deepen debate on nuclear power operations toward the spring and reach conclusions in step with a planned revision in the summer of the law governing nuclear damage compensation, the Yomiuri said.

Through the overhaul, the government is likely to seek the public's understanding on the restart of nuclear reactors shut for regular maintenance, it added.

The Nikkei business daily reported that the trade ministry was considering separating licensing system for power generation, transmission and retailing as part of power sector reform aimed at opening it up to smaller players.

Last month, the government announced the agenda for power sector reform, including a possible separation of power generation and transmission operations, a long-discussed idea that would break the monopolies of regional power companies like Tepco, but stressed that any movement on the