* Plan reinstates nuclear as important energy source
* Majority of Japanese support gradual exit of nuclear power
* Utilities may have to write off most nuclear assets (Adds comment from power official, Paladin Energy share price)
TOKYO, April 11 (Reuters) - Japan's cabinet on Friday approved an energy policy reversing the previous government's plans to gradually mothball nuclear power plants, a move likely to be unpopular with a wary public following the 2011 Fukushima disaster.
But the plan may be too little too late for Japan's moribund atomic industry, which is floundering under the weight of estimated losses of almost $50 billion, forcing two utilities to ask the government for capital last week.
Plant operators have had to pay out almost $90 billion on replacement fossil fuels, with domestic media saying they have also spent an estimated 1.6 trillion yen ($16 billion) on nuclear plant upgrades to meet new safety guidelines.
A recent Reuters analysis shows as many as two-thirds of the country's 48 idled nuclear reactors may have to be left closed because of the high cost of further upgrades, local opposition or seismic risks.
"I think it is unavoidable that the Japanese utilities will write off most of their nuclear 'assets' and move on," said Mycle Schneider, a Paris-based independent energy consultant.
The plan defines nuclear as an "important baseload power source" meaning it can feed constant power to the grid to meet minimum requirement. But the policy document did not specify the share of nuclear in the nation's energy mix.
"Given the slim realistic prospects for a major nuclear share, the challenge will be flexibility and the whole baseload concept flies out of the window," Schneider said.
The government also named coal and hydro power as baseload sources.
"The plan makes clear we will reduce reliance on nuclear power through a variety of measures," industry minister Toshimitsu Motegi told reporters after the cabinet meeting, adding that the government might decide on an ideal energy mix within two or three years.
Makoto Yagi, the president of Kansai Electric Power Co and chairman of the electricity industry's association,
said industry wanted the plan implemented steadily, as a core national policy.
"We will also contribute to national energy policy by utilising nuclear power, based on the fundamental premise of ensuring safety," Yagi said in a statement.
Shares in Australian uranium producer Paladin Energy rose nearly 5 percent after the news that Tokyo had reinstated nuclear energy as part of national policy.
Japan will do as much as possible to increase renewable energy supplies, Motegi said. The government has set up a ministerial level group to study boosting such energy sources.
In the plan on Friday, Japan said it would aim to surpass renewable energy targets in past plans.
A footnote in the document said previous plans had set a target for renewable energy sources to contribute 13.5 percent of total power generation in 2020 and around 20 percent in 2030. Renewable energy sources, including hydro power, contributed around 10 percent of the country's energy by 2012.
The decision to reinstate nuclear power is likely to be unpopular and Prime Minister Shinzo Abe had to spend months convincing sceptical members of his ruling Liberal Democratic Party as well as coalition partner New Komeito, which opposes atomic energy, to accept the final draft of the plan.
The public has turned against nuclear power after watching Tokyo Electric Power Co's struggle to deal with the disaster at its Fukushima Daiichi station following a massive earthquake and tsunami in March 2011.
The crisis was the worst since the Chernobyl disaster in 1986 and all reactors in Japan have been shut for safety checks with no schedule for restarts.
Two reactors in southwestern Japan have been put on a priority list for safety screenings by the country's Nuclear Regulation Authority.
Recent polls put opposition to nuclear restarts at about two-to-one over support. An Asahi newspaper poll last month found that nearly 80 percent of those surveyed supported a gradual exit from atomic power.
The Democratic Party of Japan decided on an energy policy that set targets for renewable energy and pledged to phase out nuclear power but was swept from power by the LDP at the end of 2012.
Abe's government has dropped plans to introduce a demonstration fast-breeder reactor in 2025 and a commercial reactor before 2050 after decades of scandals and delays at the Monju prototype reactor.
The energy plan unveiled on Friday said Monju would become an international research centre focused on reducing nuclear waste and toxicity.
But the plan says the government will continue working on reprocessing nuclear fuel at the Rokkasho facility in northern Japan and maintain storage facilities for used fuel. ($1=101.52 Japanese Yen) (Reporting by Osamu Tsukimori and Mari Saito; Writing and additional reporting by Aaron Sheldrick; Editing by Ed Davies and Joseph Radford and Clarence Fernandez)