Experts judged on Wednesday that a reactor on Japan's west coast is located on ground at high risk of an earthquake, setting in motion a process that will likely lead to the first permanent shutdown of a nuclear plant since the 2011 Fukushima crisis.

Mothballing the reactor at Japan's oldest nuclear station would be the most stringent measure adopted in Japan since the meltdowns at the Fukushima Daiichi nuclear station north of Tokyo exposed failings in nuclear oversight. The experts' finding is likely to send shockwaves through an industry that has long been used to a light touch from regulators.

"It is no longer business as usual. This is the beginning of a long-term restructuring of the nuclear power business in Japan," said a senior adviser on atomic policy, who requested anonymity because he is not authorised to comment on safety issues.

Japan's nuclear operators, which only have two out of 50 reactors running while they await safety checks from the country's new regulator, have been too optimistic about their chances for early restarts, according to the adviser.

They are struggling under the weight of losses from having to import fossil fuels to make up for lost nuclear generation capacity, which has pushed the world's third-biggest economy into a record trade deficit.

A panel of seismologists advising the Nuclear Regulation Authority (NRA) issued their assessment that a fault known as D-1 under the Tsuruga nuclear plant is active. This paves the way for NRA to rule that the station is too risky to operate.

"Erring on the side of safety, we believe the D-1 faultline is active," the panel concluded in its report.

"Safety levels (at Tsuruga) have been low and it is really just a matter of luck that there hasn't been an accident," Kunihiko Shimazaki, the head of the panel and a commissioner of the NRA, said after the report was finalised. "We are taking the first steps to correct the situation."

REACTORS UNDER REVIEW

Reactors at five other nuclear stations are under review over the possibility they also sit on active faults.

Japan Atomic Power Company, which operates the two-reactor Tsuruga station, reacted angrily to the findings, which put the plant in breach of nuclear station siting guidelines set by the government. It accused the panel of bias.

"We deeply regret that they made such a conclusion this time and it is absolutely impossible for us to accept it," it said in a statement.

"We hereby ask the panel of experts to come to a fresh conclusion after reviewing existing data with a neutral and fair point of view, with discussion on a strictly scientific basis and clarification of the grounds of understanding."

While the NRA does not have legal authority to order a permanent shutdown, its chairman, Shunichi Tanaka, said in December the watchdog would not allow the Tsuruga No 2 unit to restart, should the fault be found to be active.

The NRA was set up in September last year to replace a regulator that was widely criticised for being too close to the industry it was supposed to oversee.

The NRA's commission is expected to endorse the findings on Tsuruga as early as next Wednesday and decide what action to take when new regulations on reactors go into effect in July.

Those regulations would make the current guidance that nuclear stations cannot be built over active faultlines legally enforceable.

Japan is one of the world's most seismically active countries. An earthquake and tsunami in March 2011 caused three reactor meltdowns at the Fukushima plant, the worst nuclear disaster in 25 years.

Tsuruga's No 2 unit has 1,160-megawatts of capacity and is adjacent to the 357 megawatt No 1 unit, Japan's oldest reactor.

That reactor, also under review over a possible active faultline, may also have to be mothballed as it is more than 40 years old, the lifetime limit for operations under policy introduced since Fukushima. - Reuters