By Stanley White and Kiyoshi Takenaka
TOKYO (Reuters) - Japan's government scrambled to assure wary public Thursday that stress testing nuclear reactors did not call into question their safety after confusion over the plan threatened to delay the first restart of reactors since the March 11 earthquake triggered a radiation crisis.
Wednesday's announcement of planned tests prompted the mayor of the southern town of Genkai, who had accepted earlier safety assurances, to call off a planned restart of two reactors at a local plant run by Kyushu Electric Power.
The government has hoped that Genkai's approval would encourage other communities to give a green light to reactor restarts and help avert crippling power blackouts at a time when the Japanese economy is still recovering from the post-quake slump.
Trade Minister Banri Kaieda told reporters stress tests would serve as an additional assurance, suggesting, but not saying explicitly, that local officials did not have to wait with their decisions for the tests results.
"The safety of the nuclear reactors has already been confirmed, but safety tests will be conducted to further increase the sense of safety," he told reporters.
An official at Japan's Nuclear and Industrial Safety Agency that is due to oversee the tests, quoted by the Kyodo agency was more direct, telling residents of another town hosting a nuclear plant that it could be restarted without a stress test.
Kaieda, who took the blame for the confusion, indicated he was prepared to resign, but that this was not the right time to do so.
"I'll take responsibility when a time comes ... But for now I need to tackle the tasks that are piling up."
Kaieda's departure would add to problems faced by increasingly isolated Prime Minister Naoto Kan, who has just lost his reconstruction minister after barely a week in office and faces calls for his resignation both from the opposition and from within his own party.
Kan's government has been reviewing its energy policy to reduce the nation's reliance on nuclear energy but says restarting reactors is essential to meet peak energy demand, and hoped the tests would ease public mistrust of the nuclear industry.
"We want the stress tests to serve as a reference point for restarting nuclear reactors. This is so the public can feel more safe and secure," Cabinet Secretary Yukio Edano told reporters.
That, however, has backfired, sowing confusion among local governments and prompting investors to sell utility stocks out of fear that the tests could lead to prolonged shutdowns forcing power companies to depend more on costly imported fuels.
Shares of Genkai plant operator Kyushu Electric Power Co, fell 7.5 percent, while Kansai Electric Power Co was down 8.4 percent.
The tests will use simulations to confirm how well each reactor could withstand a severe event such as the March earthquake and tsunami that triggered meltdowns at Tokyo Electric Power Co's Fukushima plant.
Kaieda said the tests should be similar to those now carried out by the European Union and take similar amount of time.
EU stress tests that began on June 1 require each nuclear plant operator to submit a progress report on August 15 and a final report on October 31. These will become the basis for national reports to be subjected to peer review, which will be completed by April 2012.
The EU Commission is due to file a final report to the EU Council in June 2012.
Safety fears after the March disaster knocked out cooling systems at the Fukushima Daiichi plant, 240 km (150 miles) north of Tokyo, triggering reactor meltdowns, have made restarting reactors shut for regular maintenance problematic.
Only 19 out of Japan's 54 reactors are now in operation and the trade and industry ministry, which manages the nuclear industry, is keen to get idled ones back on line to avoid power blackouts during the summer, when electricity demand peaks.
Wednesday's sudden announcement that the government was planning stress tests for all nuclear facilities caught local authorities off-guard and came under fire in media as Kan's latest policy flip-flop.
"Prime Minister Kan made a statement suggesting that stress tests are necessary for reactor restarts," said Genkai Mayor Hideo Kishimoto.
"This made me feel my decision was meaningless, and I feel furious about it."
Yasushi Furukawa, governor of Saga Prefecture, also slammed Kan for lacking a consistent policy on restarting reactors.
The consent of the governor is needed for the reactors to resume operation.
(Additional reporting by Osamu Tsukimori; Writing by Tomasz Janowski; Editing by Sugita Katyal)