Japan mulls spinning off part of nuclear operator: report

Workers in protective suits operate remote-controlled machinery to clear debris in the compound of Tokyo Electric Power (TEPCO) Co.'s crippled Fukushima Daiichi Nuclear Power Plant in Fukushima, northern Japan in this April 10, 2011, handout file photo released by TEPCO.

TOKYO (Reuters) - The Japanese government is considering spinning off the part of Tokyo Electric Power Co (TEPCO) that oversees the stricken Fukushima Daiichi nuclear plant, Jiji news agency reported on Tuesday.

The spun-off unit would become a government funded firm dealing with the nuclear accident and compensation issues, while the remaining part of TEPCO would stay publicly listed, Jiji reported without citing a source.

On March 11 a magnitude 9 earthquake and a massive tsunami triggered the nuclear disaster where reactors at the Fukushima Daiichi facility, 240 km (150 miles) north of Tokyo, were hit by a loss of power which disabled cooling functions.

The fate of plant operator TEPCO, at the center of the world's worst nuclear disaster in 25 years, remains uncertain as it struggles to contain the accident and faces huge compensation requirements that could total several trillion yen according to media reports.

The possibility of the government injecting public money into the utility has been touted, and a government source told Reuters that a plan to separate and nationalize TEPCO's nuclear business has been considered.

(Reporting by Yoko Kubota and Kazunori Takada; Editing by Joseph Radford)