Japanese power firm bailout may be vetoed

But in a sign of the delicate balance Prime Minister Yoshihiko Noda’s administration must strike, the top government spokesman said no consensus had yet been reached.

The Fukushima plant was wrecked by a quake and tsunami last March, triggering the world’s worst nuclear crisis in 25 years and swamping the firm with huge clean-up, compensation and decommissioning costs, as well as a big fossil fuel bill.

As expected, Trade Minister Yukio Edano, who also holds the energy portfolio, did approve £6bn in additional support for the utility, also known as Tepco, to help to compensate victims of the Fukushima crisis.

However, the government has been planning to put more public money into the utility in what would be one of the world’s biggest bailouts outside the banking sector.

A visibly-annoyed Mr Edano told Tepco President Toshio Nishizawa in front of news reporters: “If Tepco submits a business plan seeking a capital injection without sufficient voting rights relative to the size of injection, I have absolutely no plans to approve it as long as I am in this position.”

The top government spokesman, however, said Mr Edano’s remarks did not necessarily represent the wider government view.

“That’s his comment as a minister. But it’s not as if he made the comment after a consensus had been formed within the government,” Chief Cabinet Secretary Osamu Fujimura told a separate news conference.

Tepco has already bowed to the inevitable and agreed to accept public funds, and has appeared resigned to the government taking more than a one-third share, which would give it veto rights at shareholders’ meetings.

But the utility, which is still politically powerful despite its damaged image and perilous financial state, is resisting the idea of the government having a bigger say.

Mr Nishizawa said: “I have said in the past that I want to remain in the private sector to exercise vitality. To most effectively form facilities, it is better to remain as a private company.”

The government is walking a tightrope between the need to keep Tepco afloat so it can pay compensation to disaster victims and supply power, and a desire to avoid looking lax towards the company, which many voters feel mishandled the nuclear crisis and perceive as an arrogant monopoly.