Japan may review spending on plutonium fuel cycle-minister

By Aaron Sheldrick and Linda Sieg

TOKYO, Dec 10 (Reuters) - Japan may review spending on reprocessing plutonium for use in nuclear reactors, a minister appointed to identify wasteful spending told Reuters, following years of government outlays on the controversial programme that has yielded no results.

The minister's comments come after the operator of Japan's fast breeder reactor, designed to use plutonium extracted from spent reactor fuel, was declared unfit following decades of accidents, missteps and falsification of documents.

Costs for the Monju breeder reactor have ballooned to about 1 trillion yen ($8 billion) while Japan's public debt is the highest among industrialized nations.

Taro Kono, a ruling Liberal Democratic Party member who is a critic of the Monju facility and the nuclear industry in general, was appointed to examine government spending in a recent cabinet reshuffle by Prime Minister Shinzo Abe.

While Kono emphasized he cannot overturn government policy, he can review public projects and said Abe had told the cabinet that wasteful spending had to be taken "out of the budget."

He has been reviewing part of the government budget request of 102 trillion yen for the fiscal year starting March, including a little-used ship carrying nuclear fuel and subsidies to towns that host nuclear power plants.

"In my portfolio, I can ask them if the money is spent wisely and that's what I have been doing and the nuclear fuel cycle is no exception," the U.S.-educated Kono said in an interview in English on Thursday.

He said next year's review could be widened to include all government spending on nuclear projects, something that might resonate with voters after the Fukushima disaster in 2011 turned the public against atomic power.

"If they are not doing a good job, the review next year will be all nuclear, maybe," Kono said.

His comments could have implications for another costly nuclear project that is mostly in private hands but has strong government support and receives some public funds.

The Rokkasho plutonium reprocessing facility in northern Japan is meant to provide fuel for Monju and some of Japan's nuclear reactors, but completion was delayed for a 23rd time last month.

The plant has been beset with problems since the first concrete was laid in 1993 and costs have ballooned to 2.2 trillion yen ($18 billion) from 760 billion yen.

Meanwhile, Japan's plutonium stockpile has expanded to nearly 50 tonnes, with stocks held in Britain and France as well as in Japan. Recently, a group of 31 scientists wrote to Abe urging him to abandon reprocessing.

With all but two of Japan's reactors shut down in the wake of the Fukushima disaster and no immediate use for the plutonium, there is little meaning to the costly exercise of extracting more from spent fuel, critics say.

"The PM's directive is very clear. If we point out any items that are not spent well it has to be out of the budget," Kono said. "That's why a few ministers are not speaking to me right now," he added, with a laugh.

($1 = 123.3000 yen)

(Additional reporting by Kentaro Hamada; Editing by Christian Schmollinger)