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BERLIN (Reuters) - Germany plans to shut all nuclear reactors by 2022, Chancellor Angela Merkel's ruling coalition announced on Monday, in a policy reversal drawn up in a rush after the Fukushima disaster in Japan.
The coalition, sensitive to accusations it may increase dependence on highly polluting brown coal, said it planned to cut power use by 10 percent by 2020 and further expand the use of renewables such as wind and solar power.
Merkel's bid to outflank the opposition smacks of opportunism to many Germans but could ease an alliance with the anti-nuclear Greens that may be her best bet to stay in power. Polls clearly show that most Germans dislike nuclear energy.
In nine months, she has gone from touting nuclear plants as a safe "bridge" to renewable energy and extending their lifespan to pushing a nuclear exit strategy that rivals the ambitions of the Social Democrats and Greens.
Her change of heart coincides with a string of disastrous election results for her Christian Democrats (CDU) and their Free Democrat (FDP) allies that have been partly blamed on her unpopular pro-nuclear policy so far.
"I don't think she will take many votes from the Greens, who have promoted this issue for decades," said Carsten Koschmieder, a political scientist at Berlin's Free University.
"But with the FDP so weak and Merkel looking for other allies, who might be the Greens, the atomic issue was the main obstacle that needed to be removed," he said.
Merkel may be hard pressed to sell the plan as anything but a political defeat at the hands of her Social Democrat (SPD) and resurgent Green rivals. Tens of thousands of people demonstrated against nuclear energy at the weekend all across Germany.
The proposal, which quickly came under fire from abroad, may be even more ambitious than the plans of the SPD and Greens, taking 8 of 17 nuclear plants offline now and 6 more by 2021.
But the most drastic decision by an industrialized country after Fukushima could still face opposition from utility firms.
In financial markets, share prices of renewables surged higher. SolarWorld was up 9.8 percent, Q-Cells gained 13.9 percent and Renewable Energy and Vestas both gained 3.1 percent
Only nine months ago Merkel announced an extension of the lifespan of unpopular nuclear plants by an average 12 years. In March, after Japan's earthquake and tsunami, she reversed that and put Germany's entire energy strategy under urgent review.
"Our energy system has to be fundamentally changed and can be fundamentally changed. We want the electricity of the future to be safer and, at the same time, reliable and economical," Merkel told reporters on Monday.
To accompany the nuclear exit, Germany plans to cut electricity usage by 10 percent by 2020 and double the share of renewable energy sources to 35 percent over the same period, according to a government paper seen by Reuters.
Merkel did not outline further details but the government paper said Germany's goal of reducing greenhouse gas emissions by 40 percent by 2020 remained in place.
The government could still lose 2 billion euros a year in revenues, one official said.
Most voters in Germany oppose atomic energy, which provided 23 percent of overall power before the seven oldest stations were shut down in March.
Sweden, whose state-owned power group Vattenfall operates two of Germany's nuclear plants, said setting a date to shut them was the wrong approach. Berlin should instead focus on boosting the use of renewable energy.
Merkel's about-turn has done little to gain her support, but has drawn scorn from the opposition and her own party ranks.
"Closing down a little bit is not possible," said Greens party co-leader Claudia Roth, referring to coalition plans to keep one of the older plants as a "cold reserve" for two years.
Nuclear policy is heavily disputed in Germany and the issue helped boost the Greens, who won control of one of the CDU's stronghold states, Baden-Wuerttemberg, in a March vote.
Merkel's majority in the Bundesrat upper house, where the states are represented, vanished last year after the CDU failed to hold onto the populous North Rhine-Westphalia state. Losing Baden-Wuerttemberg, a vote held in the shadow of the Fukushima crisis, dealt another blow to Merkel's authority.
Germany's largest power provider RWE, which had suggested ending nuclear power in 2025, signaled its opposition to the deal and said it would keep "all legal options open."
"The end (of nuclear power in Germany) by 2022 is not the date we had hoped for," a spokesman said, declining to comment on the effect of the decision on the company's earnings.
The decision could still face opposition from RWE's peers E.ON, Vattenfall and EnBW, the other three utility companies that run the 17 plants.
German industry association BDI said the exit would push up energy prices, make it more difficult to reach emissions targets and would mean that "the shortfall of nuclear power will have to be compensated by coal and gas power stations."
The German decision still needs to go through parliament and leaders of the opposition Social Democrats and the Greens were present at parts of the meeting to enable a broad consensus.
Reporting by Annika Breidthardt, Andreas Rinke, Hans-Edzard Busemann and Stephen Brown; additional reporting by Vera Eckert, Peter Dinkloh, Josie Cox and Jonathan Gould in Frankfurt, editing by Philippa Fletcher, Ralph Boulton and Peter Millership