UPDATE 3-Japan trade min urges Tepco to consider state control

* Trade minister urges Tepco president to consider all options

* Tepco asks for additional $9 bln for compensation

* Tepco faces massive compensation, cleanup costs

* Minister unveils agenda for power sector reform

By Yoko Kubota

TOKYO, Dec 27 (Reuters) - Japanese Trade Minister Yukio Edano on Tuesday urged Tokyo Electric Power Co, operator of the crippled Fukushima nuclear plant, to consider temporarily going under state control, in the first official hint at a long speculated de facto nationalisation.

Japan's biggest utility, also known as Tepco, faces massive compensation and cleanup costs after an earthquake and tsunami on March 11 triggered the world's worst nuclear crisis in 25 years at the Fukushima plant, putting the firm's future in doubt.

The government may inject about $13 billion into Tepco as early as next summer, sources told Reuters this month, effectively nationalising it via a purchase by a government-run bailout fund of newly issued Tepco shares.

"Tepco's financial base must be fundamentally strengthened if it is to pull off the cleanup from the nuclear disaster without a hitch, decommissioning the reactors and compensating victims swiftly and in earnest," Edano, who oversees energy policy, told Tepco President Toshio Nishizawa after cabinet ministers met to discuss power sector reform and support for Tepco.

"I want the (government-backed bailout) fund and Tepco to consider a comprehensive business plan without excluding any options, including temporary state control," he said, stepping up pressure on the utility to agree to the possibility of a de facto nationalisation.

Tepco and the government-backed bailout body are aiming to come up with a comprehensive business plan by March that will include restructuring steps and possible electricity rate hikes.

Nishizawa did not indicate whether Tepco would accept an injection of public funds or how the utility could survive without one.

"There were various instructions, or rather opinions, expressed by the minister today. We would like to move forward in compiling our comprehensive special business plan based on that," Nishizawa told reporters.

MASSIVE COSTS, UNCLEAR FUTURE

The utility and the government declared this month that the reactors at the Fukushima plant 240 km (150 miles) northeast of Tokyo had achieved a state of cold shutdown, with the acute phase of the crisis behind them and radiation leaks significantly reduced, more than nine months after multiple fuel meltdowns forced tens of thousands to evacuate the surrounding area.

But decommissioning the reactors will take up to 40 years and may cost Tepco an estimated 1.2 trillion yen ($15.4 billion), while the bill to compensate victims may reach 4.5 trillion yen in the first two years after the crisis alone, the government and an advisory panel said, leaving the firm's future unclear.

Earlier on Tuesday, Tepco asked the government-backed bailout body for an additional 690 billion yen to help compensate victims of the crisis, on top of 890 billion yen the government had agreed to in November.

Tepco must win Edano's approval before the funds are released, but Edano told Nishizawa that the utility must first improve its compensation payment system and pay victims more quickly.

A source close to the matter told Reuters earlier in the day that Edano was likely to approve the request as early as January.

The utility, also struggling with the cost of thermal fuel to make up for the loss of nuclear power, is seeking additional loans and plans to raise corporate electricity rates in April, while aiming to cut 2.6 trillion yen in costs over 10 years.

Edano announced on Tuesday an agenda for power sector reform to be discussed under an energy policy overhaul the government is considering in the wake of the Fukushima crisis.

The agenda included a possible separation of power generation and transmission operations, a long-discussed idea that would break the monopolies of regional power companies like Tepco and open the sector to smaller players, but stressed that any movement on the proposal would be cautious.