Japanese government to bear more Fukushima cleanup costs for Tepco By Kentaro Hamada TOKYO (Reuters) - Japan will chip in more taxpayer money and other financial support to help Fukushima plant operator Tokyo Electric Power Co clean up the world's worst nuclear disaster in a quarter century, officials said on Friday, the latest government lifeline for the embattled utility. Criticism of the utility's handling of the massive clean-up from the March 2011 disaster had sparked calls to spin off Fukushima-related work and place it under government control or even put Tepco, as the company is known, into bankruptcy. Prime Minister Shinzo Abe's government, however, has instead opted to provide fresh financial support while backing an internal Tepco restructuring due to what experts termed reluctance to face legal responsibility for the disaster or risk ripple effects on the wider power industry. "I want to address vital issues by making clear the roles of Tepco and the government and make concrete the path to rebuilding the lives of victims and affected local governments," Abe said at a meeting to finalize the new steps. Abe, in the centerpiece of Tokyo's successful bid in September to host the 2020 Olympics, said he would be responsible for a plan to cope with the legacy of the disaster in which a huge earthquake and tsunami caused triple meltdowns, spewing radiation and forcing some 160,00 residents to flee. "They (the government) are picking up the tab," said Martin Schulz, a senior research fellow at Fujitsu Research Institute. The bottom line is that government oversight is increasing, but the management remains in Tepco's hands. Under the new plan, the government, which essentially nationalized Tepco last year with a 1 trillion yen ($9.59 billion) injection of public funds, will nearly double to 9 trillion yen ($86.35 billion) the amount of interest-free loans it provides the utility through the state-backed Nuclear Damage Liability Facilitation Corp (NDLFC). Under the original scheme crafted to keep Tepco afloat after the disaster, Tepco was liable for compensation, decontamination and decommissioning of the reactors and was to pay back the loans eventually from electricity revenues. This time, Tepco will remain responsible for paying back 5.4 trillion yen of the interest-free loans from its revenues. The government will try to recover at least part of another 2.5 trillion yen for decontamination through the eventual sale of Tepco shares held by the NDLFC. The government will also provide 1.1 trillion yen from tax money to build a facility to store radiation-contaminated soil near the crippled plant. Additional decontamination projects are expected to be funded from the national public works budget, Japanese media have said. The government has already pledged to provide financial support to develop cutting-edge technologies needed to decommission the crippled reactors, a job expected to take decades and require technologies yet to be developed. In a draft extra budget for the fiscal year to next March, the government allocated 47.9 billion yen to handle radiation-contaminated water at the plant and help with decommissioning. Tepco faces massive liabilities as it decommissions the facility, compensates tens of thousands of evacuees and pays for decontamination of an area nearly the size of the U.S. state of Connecticut. The firm has cut its costs and raised prices, but its long-term sustainability remains in doubt. It has yet to win support to restart its Kashiwazaki Kariwa nuclear plant on Japan's northwest coast, which could save it about $1 billion a month in fuel costs. Tepco's creditors, including Sumitomo Mitsui Financial Group are set to sign off on 500 billion yen in loans to the utility next week, when Tepco is also expected to submit a revised business plan to the government. Given Tepco's uncertain business prospects, lenders have been providing loans in exchange for collateral, but Tepco and the NDLFC have asked lenders to provide new loans without collateral, possibly from sometime next year, as a way to facilitate restructuring of the utility. $1 = 104.2300 Japanese yen Writing by Linda Sieg; Additional reporting by Taiga Uranaka and Linda Sieg; Editing by Matt Driskill