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Japan's Nuclear Industry Credibility Crumbles amid Scandal

A Japanese nuclear power plant has come under fire for trying to sway the outcome of a public forum on atomic safety, dealing a fresh blow to the industry's credibility.

TOKYO | (Reuters) - A Japanese nuclear power plant has come under fire for trying to sway the outcome of a public forum on atomic safety, dealing a fresh blow to the industry's credibility four months after the world's biggest nuclear disaster since Chernobyl.

An employee with Kyushu Electric Power Co instructed workers at the utility and its affiliates to pose as ordinary citizens and send e-mails backing the restart of nuclear reactors in southern Japan to a televised public hearing.

A massive earthquake and tsunami crippled the coastal Fukushima-Daiichi power plant in northeast Japan on March 13, sparking a fuel-rod meltdown and the biggest nuclear crisis since Chernobyl in Ukraine in 1986.

The plant is still leaking radiation in a protracted disaster which prompted the government to go back to "scratch" on its nuclear energy policy. Only 19 of Japan's 54 reactors are still running.

Kyushu Electic President Toshio Manabe apologized for the email scandal on Friday.

"I am reflecting deeply on the actions that tried to influence a hearing that should be fair and neutral," Jiji news agency quoted Manabe as telling a senior vice minister for trade and industry. "I apologize to the people."

Analysts say the scandal reflects panic in Japan's atomic power industry, long coddled by political, corporate and regulatory interests dubbed the "nuclear village" but now facing growing anti-nuclear sentiment as workers battle to end the Fukushima crisis.

"There is growing suspicion that power companies are playing fast and loose with data to support their cause and will go so far as to orchestrate public support," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus.

"The more the media pulls back the veil, the angrier the public is getting." The e-mail scandal has been daily fodder for mainstream media, often accused of being soft on the industry.

Public trust in utilities and their regulators has already been dented by patchy and slow disclosure about the crisis at Tokyo Electric Power Co's Fukushima plant.

"They (Tokyo Electric) have zero credibility," Kingston said.

Industry critics said the e-mail scandal was no surprise, but added it nonetheless deepened doubts about both safety and whether threatened power outages were a real risk.

"The public reaction is leaning against nuclear power and I think the utilities feel a sense of crisis," said Harumi Kondaiji, a local lawmaker in the western city of Tsuruga, host to three reactors. "At this point, we cannot believe them."

With just 19 reactors still running, and with many of those set to undergo regular inspections in coming months, the country could be without nuclear power by the end of April because others will be shut for regular inspections.

Cracks in Relations

Even local authorities previously inclined to take the utilities at their word expressed anger.

"We thought we had a relationship of trust, but now there are cracks," Hideo Kishimoto, mayor of the southern town of Genkai which hosts the Kyushu Electric reactors in question, told a TV broadcaster.

The e-mail scandal was another twist in a confusing saga over whether utilities can win local communities' agreement to resume operations at reactors shut down for regular inspections.

The central government announced abruptly this week that it planned stress tests to check the safety of all of Japan's 54 reactors, despite earlier safety assurances and requests to restart reactors after regular inspections were finished.

On Thursday, Genkai's Kishimoto withdrew approval for the restart of two Kyushu reactors and a day later another utility said it was postponing a planned restart after failure to gain local approval, which is required not by law but by custom.

With the peak summer demand period approaching, the government has told firms to cut peak electricity use by 15 percent from July 1, and along with utilities has warned that failure to comply risks blackouts and further harm to the economy as Japan tries to recover from its triple disasters.

But with industry and government credibility in doubt, gauging the actual extent of the risk is tough.

Reporting by Linda Sieg; Editing by Nick Macfie