* Post-Fukushima agency's reputation tested as reactor restarts loom
* New commissioner Tanaka has received nearly $100,000 in funding from industry
* Industry funding for academic research in Japan not uncommon
* Stern critic of nuclear safety practices Shimazaki to exit panel
By Mari Saito and Kentaro Hamada
TOKYO, June 10 (Reuters) - Japanese legislators approved a reshuffle at the nuclear safety regulator including appointing a commissioner who has received nearly $100,000 from nuclear-related entities over the past decade to fund his academic research.
Among the two commissioners stepping down from the five-member panel at the Nuclear Regulation Authority (NRA), one is a fierce critic of safety practices in the industry.
Opponents said the changes, which were approved on Tuesday, undermined Prime Minister Shinzo Abe's commitment to an independent watchdog at a time when utilities are pushing to restart their idled reactors.
The NRA's independence is under scrutiny as it reviews applications to restart reactors, all 48 of which were shut in the wake of the 2011 Fukushima disaster.
The commission was set up as an independent agency after Fukushima to replace a regulator seen as too close to the industry and to an energy ministry that promoted atomic power. Since then, utilities have pledged more than $15 billion to upgrade equipment and facilities.
Japan's lower house of parliament, where Abe has a majority, approved his government's nomination of Satoru Tanaka, a nuclear engineering professor at the University of Tokyo and a proponent of nuclear power.
It also approved geologist Akira Ishiwatari, whose candidacy generated little controversy. The upper house is expected to also give them the greenlight.
Industry analysts said any nuclear energy expert in Japan would have received funding from the industry given the decades of close ties between utilities and Japanese academia.
"But it is a matter of the degree of money you receive," said Hideyuki Ban of Citizens' Nuclear Information Center, a non-profit anti-nuclear group.
Tanaka did not respond to e-mailed requests for comment on the donations, which were detailed in financial disclosures and Japanese media. Tokyo University would not provide contact information for him, citing privacy concerns.
"Bringing someone like (Tanaka) on as a regulator changes the fundamental role of the NRA," said Tomoko Abe, an independent anti-nuclear lawmaker not related to the prime minister.
"This nomination could undermine the very role of the regulator."
Chief Cabinet Secretary Yoshihide Suga said last month that the nominees were the "best people for the job, who can fulfil their roles from an independent, scientifically unbiased and fair standpoint".
Akihiro Sawa, a research director at the 21st Century Public Policy Institute, a think tank affiliated with Japan's biggest business lobby Keidanren, defended Tanaka.
"Academic institutions now encourage professors to get research funds and it's very competitive, so his background should not be judged purely on the outside funds he has received," said Sawa.
YEARS OF FUNDING
Tanaka, who was not at parliament on Tuesday, had sought to dispel concerns about his candidacy.
He recently told public broadcaster NHK: "If I am approved, I will take into account mistakes from the Fukushima accident and I will do my utmost by utilising all my experience."
Eight months after Fukushima, he was one of the first experts to say it may be safe to consider atomic energy again, according to remarks he made to a government panel on energy.
Between the 2004 and 2010 fiscal years, Tanaka received 6 million yen ($58,500 at current exchange rates) for research from three firms according to disclosures made by Tokyo University in response to a public information request from Reuters: Electric Power Development Co Ltd, known as J-Power, which is building a nuclear plant in northern Japan; reactor maker Hitachi Ltd's nuclear division; and Hitachi GE Nuclear Energy Ltd.
Japan's Jiji news service said Tanaka also received around 3 million yen over five years to March 31, 2012 from the Tepco Memorial Foundation, an organisation set up by the predecessor company to Fukushima operator Tokyo Electric Power, or Tepco. A foundation spokesman said Tanaka had been paid for judging research grants but declined to give an amount.
Tokyo University said it had no information on any possible payment from the Tepco foundation, as this would be Tanaka's private income.
In disclosures to the NRA in April, Tanaka said he received at least 500,000 yen in the year to March 2012 from the foundation. NRA nominees are only required to disclose funding received in the past three years.
For the year to March 2012, Tanaka told the NRA he also received a total of 1.1 million yen from Hitachi GE Nuclear Energy and Taiheiyo Consultant, an engineering firm.
None of the original NRA commissioners received funds from a utility or nuclear plant operator for their research in the three years leading up to their appointment, according to disclosures made when the NRA was set up.
Commissioner Toyoshi Fuketa received about 1.5 million yen in fiscal 2009-10 from Nuclear Fuel Industries for research he did with Japan's sole producer of nuclear fuel, an NRA filing showed.
The NRA's most critical voice, seismologist Kazuhiko Shimazaki, will retire in September after two years as its deputy, a period in which he angered the industry with safety demands that in one case effectively scuttled a reactor restart.
Activists and some NRA officials had hoped Shimazaki would remain, sources with direct knowledge of the matter said. But the government said he and a former Japanese ambassador to the United Nations, Kenzo Oshima, wanted to leave at the end of their two-year terms.
Shimazaki has not spoken publicly about his retirement and the NRA declined to make him available for comment. It's not clear who will be the NRA's new deputy.
"The main objective of this shuffle is to remove commissioner Shimazaki," said Tetsunari Iida, executive director of Japan's Institute for Sustainable Energy Policies, an anti-nuclear group. "The industry would never be satisfied if he wasn't replaced."
An official at a utility who asked not to be identified because of the sensitivity of the topic called Shimazaki's retirement a "small victory" and said utilities hoped restarts would now move ahead quickly.
The first restart, at the Sendai reactor on Japan's island of Kyushu, is expected to be approved in the coming months after the utility resubmitted its application following demands from Shimazaki to upgrade its assumptions over earthquake risk.
The NRA chairman acknowledged the regulator was under pressure "from all different directions".
"We have worked together to create the functions and the independence of the regulator," Shunichi Tanaka, who is no relation to the new commissioner, told a recent news conference.
"This is a groundbreaking thing, and we will all work toward protecting it."
($1 = 102.52 yen) (Editing by William Mallard and Dean Yates)