Faced with the deregulation of the power market, the Atomic Energy Commission has decided to reassess the costly fast breeder reactor program, the Nihon Keizai Shimbun said without citing sources.

Fast breeder reactors use plutonium extracted from spent uranium fuel and can produce more fissionable material than they consume.

Development of such reactors has been the main thrust of Japan's nuclear power policy for around four decades.

Private power companies, however, have been reluctant to use this type of reactor because of doubts about safety and a lack of certainty about lower costs in future, the Nihon Keizai said.

To ease those fears, the government commission would now promote plutonium-based power generation using conventional light-water reactors, the newspaper said.

The government would continue only basic research for costly fast breeder reactors, it said.

The commission plans to draft a set of proposals by summer 2005 and formally approve the new long-range plan for Japan's nuclear energy development in November next year, the newspaper said.

The Nihon Keizai also said the commission, which comprises academics, energy industry representatives and specialist scientific journalists, would consider building a state-run facility to store spent nuclear fuel over the long term.

Officials providing administrative support for the commission denied the report, however.

"The story was speculation. We regret that. We have made no decision over the long-term direction of Japan's nuclear energy policy," said one official with the Cabinet Office, of which the commission is a part.

"We are in the process of gathering the opinions of experts and the public about the long-term policy plan," he said.

WAR.WIRE