Tokyo Electric likely liable for accident: Japan government

TOKYO (Reuters) - Tokyo Electric Power will likely be held responsible for damages stemming from a nuclear plant that was crippled by this month's massive earthquake and tsunami and has been leaking radiation, Japan's top government spokesman said.

Under Japanese law the operator of a nuclear facility can be granted an exemption from damages caused by a reactor if the accident was deemed to have been triggered by "a grave natural disaster of an exceptional character."

The government has not yet decided whether it would classify the 9.0-magnitude earthquake and tsunami on March 11 as an "exceptional" disaster, even though it killed thousands and total damages could exceed $300 billion.

Chief Cabinet Secretary Yukio Edano said it was his view that this exemption would not be applied to the damages caused by Tokyo Electric's Fukushima Daiichi plant. The government has evacuated a 20-km (12-mile) zone around the facility due to radiation concerns.

"From looking at the process and the current situation, it is impossible that Tokyo Electric would easily be exempted from liability for this accident," Edano told a regular briefing on the nuclear crisis on Friday.

Depending on the cause of a nuclear accident, either the government or insurers can be required to provide the first 120 billion yen ($1.47 billion) in liability coverage.

Tokyo Electric would be liable for all damages exceeding that amount if the exemption is not granted. If threatened with financial ruin, however, Tokyo Electric could ask the government for assistance.

Insurers of the stricken nuclear plant have already cited Japan's 1961 Act on Compensation for Nuclear Damage to signal that claims would be unlikely.

Chaucer, one of the world's leading nuclear-risk insurers, has said it expected the act to absolve the operator of liability.

Nuclear Risk Insurers, the underwriting agent for all UK nuclear insurers, has also cited the 1961 act in stating that it did not "anticipate significant losses from this event."

(Editing by Nathan Layne)