* Japan drops earlier reference to nuclear-free target by 2030s
* Business groups say shifting from nuclear could damage economy
* New nuclear regulator to set new rules for reactor restart
By Risa Maeda
TOKYO, Sept 19 (Reuters) - Japan's cabinet approved a new energy plan on Wednesday aimed at reducing reliance on nuclear power after the Fukushima disaster, but appeared to roll back its commitment to abandon atomic energy by the 2030s.
The approval coincided with the launch of a regulatory body to oversee the nuclear industry and end what critics saw as too cosy a relationship between previous bodies, plant operators and officials. The new body will play a key role in deciding whether to restart reactors since last year's disaster.
The decision to waver on a commitment, announced last Friday, to eschew nuclear power in the 2030s followed calls by powerful industry lobbies for a rethink on grounds it could damage the economy.
Trade Minister Yukio Edano, who oversees the energy portfolio, said other factors had also to be considered before making such an undertaking.
"Whether we can become nuclear free by the 2030s is not something to be achieved only with a decision by policy makers," Edano told a news conference.
"It also depends on the will of (electricity) users, technological innovation and the environment for energy internationally in the next decade or two."
Prime Minister Yoshihiko Noda, speaking later on television, said it was difficult to meet the target date and still solve some of the industry's toughest issues, like reprocessing spent fuel and storing nuclear waste.
"There's no change in a zero-nuclear goal by the 2030s," Noda said. "We can go nuclear zero at the front end of the nuclear fuel cycle, but we cannot go nuclear zero so easily at the back end of the cycle," referring to reprocessing.
Before the March 2011 quake and tsunami that caused a series of meltdowns and crippled the Fukushima plant, Japan had planned to increase to more than 50 percent the share of electricity produced by nuclear power. It had supplied about 30 percent before the disaster, the worst such accident in 25 years.
The accident spawned an anti-nuclear movement that led to a reassessment of policy. It also led to the shutdown for safety checks of all 50 working reactors - though authorities restarted two units despite opposition from environmentalists and others.
As part of the new policy, Japan aims to triple the share of renewable power -- mainly solar and wind power -- to 30 percent of its energy mix by the 2030s. But it will remain a top importer of oil, coal and gas for some time.
Finance Minister Jun Azumi told reporters the government's broad aims remained unchanged, but flexibility was needed. The public, he said, should not face additional burdens he public if power utilities ran into financial difficulty.
"We showed a broad direction towards creating a society that does not depend on nuclear energy," he said. "At the same time, however, reality calls for flexible responses, so I believe we could show efforts to achieve zero in 2030s as broad direction."
The new plan imposes a strict limit of 40 years for the lifetime of reactors with no new units to be built. It also said any restart of idled reactors was subject to the new regulator confirming their safety.
Edano said any decision on reactors operating beyond the 2030s would be taken later. At least two reactors are under construction - the 1,373-megawatt No.3 unit at Shinane run by Chugoku Electric Power Co and the 1,383-megawatt Ohma unit of the Electric Power Development Co.
The head of the new Nuclear Regulatory Agency (NRA), Shunichi Tanaka, said standards would be established to govern any restart of reactors, but this was unlikely by year-end.
The standards would replace stress tests that the government imposed last year to check the ability of reactors to withstand similar disasters to the March 2011 quake and tsunami.
Tanaka said the agency, replacing two mistrusted bodies, would be empowered to oblige power utilities to stick to safety regulations. Preventing new disasters was also a priority.
The NRA, he said, would set rules to restore public confidence, like requiring utilities to store spent nuclear fuel on the ground rather than near the top of a reactor, a major concern during the Fukushima crisis.
"We only check the risk involved with a reactor," said Toyoshi Fuketa, one of four NRA commissioners. "It is not our concern whether a reactor is needed (for power) or not."