Japan's trade minister threatened on Monday to block a plan to rescue Tokyo Electric Power Co with a $13 billion (8 billion pounds) injection of public funds unless the government gets more say in running the struggling operator of the tsunami-hit Fukushima nuclear plant.

But in a sign of the delicate balance Prime Minister Yoshihiko Noda's administration must strike, the top government spokesman said no consensus had yet been reached on the topic.

The Fukushima plant was wrecked by a quake and tsunami last March, triggering the world's worst nuclear crisis in 25 years and swamping the firm with huge clean-up, compensation and decommissioning costs, as well as a big fossil fuel bill.

As expected, Trade Minister Yukio Edano, who also holds the energy portfolio, did approve 690 billion yen ($8.9 billion) in additional support for the utility, also known as Tepco <9501.T>, to help compensate victims of the Fukushima crisis.

Aside from the added compensation support from a state-backed fund, the government has been planning to inject about 1 trillion yen in public funds into the utility in what would be one of the world's biggest bailouts outside the banking sector.

If Tepco submits a business plan seeking a capital injection without sufficient voting rights relative to the size of injection, I have absolutely no plans to approve it as long as I am in this position, a visibly annoyed Edano told Tepco President Toshio Nishizawa in front of reporters.

The top government spokesman, however, said Edano's remarks did not necessarily represent the wider administration view, suggesting rival factions were at odds over Tepco's fate.

That's his comment as a minister. But it's not as if he made the comment after a consensus had been formed within the government, Chief Cabinet Secretary Osamu Fujimura told a separate news conference.

Tepco has already bowed to the inevitable and agreed to accept the 1 trillion yen in public funds, and has appeared resigned to the government taking more than a one-third share, which would give it veto rights at shareholders' meetings.

But the utility, which is still politically powerful despite its damaged image and perilous financial state, is resisting the idea of the government having a bigger say.

I have said in the past that I want to remain in the private sector to exercise vitality, Nishizawa told a later news conference. To most effectively form facilities, it is better to remain as a private company.

The government is walking a tightrope between the need to keep Tepco afloat so it can pay compensation to disaster victims and supply power, and a desire to avoid looking lax towards the company, which many voters feel mishandled the nuclear crisis and perceive as an arrogant monopoly.

Edano also called on the utility, which serves some 45 million people, to craft a more drastic restructuring plan, sell off assets faster, minimize the burden of planned rate hikes for users and clarify the responsibility of its management. Nishizawa replied that he would take Edano's views into account.

The Fukushima crisis has prompted Japan to scrap a plan to boost atomic power to more than half of electricity demand by 2030 from about 30 percent before the accident, and is working to craft a new energy policy by summer.

SCEPTICAL PUBLIC

Edano has already urged Tepco to explain a decision to raise rates for companies by an average 17 percent from April, a painful hike for firms already struggling with a strong yen.

Tepco on the one hand is a very well-established private sector company and ... from a 'zaikai' (business circle) point of view is very important, said Koichi Nakano, a political science professor at Sophia University.

But with everything that has happened, the public is very sceptical of Tepco's intentions, so the government has to tread very carefully.

The head of Japan's biggest business lobby, Keidanren, criticised Edano's remarks, backing Tepco's position that the government should not take a majority stake in the utility.

I have never seen a nationalised company that was well-run, Kyodo news agency quoted Keidanren Chairman Hiromasa Yonekura as telling reporters.

Some compromise over the size and form of the government's stake still looks likely, said Nihon University political science professor Tomoaki Iwai.

But he added: Tepco wants a free hand but that is unrealistic ... public opinion would not settle for that.

The firm said on Monday that it expected to post a group net loss of 695 billion yen in the year to March 31 after a net loss of 623.01 billion yen in the April-December period.

The state-backed Nuclear Damage Liability Facilitation Fund, which, including the latest tranche, is providing 1.6 trillion yen to help Tepco compensate Fukushima victims, is working with the utility to draft a business plan to be unveiled in March.

The fund is backed by public money plus contributions from nuclear power operators, and Tepco is required to pay back the support in coming years.

Under the business plan, Japanese banks and insurers are likely to agree to additional lending of around 1 trillion yen to protect their already big exposures.

Media reports have said the business plan will call for the utility to swing into profit in fiscal 2014.

But that projection is based on the assumption that Tepco gets approval to raise household electricity rates by 10 percent in October and reduced fuel costs by restarting off-line reactors at its Kashiwasaki-Kariwa plant in northern Japan.

Both those conditions may prove hard to meet, given the need for the central government to sign off on the unpopular rate hikes and public concerns about safety that are making local authorities wary of agreeing to reactor restarts.

(Additional reporting by Kentaro Hamada, Mayumi Negishi and Mari Saito; Editing by Edwina Gibbs and Alex Richardson)