The Japanese government may inject between $13 billion and $19 billion (8.3 billion pounds and 12.1 billion pounds) into Tokyo Electric Power Co in a de facto nationalisation of the operator of the crippled Fukushima nuclear power plant, domestic media reported on Thursday.

Tepco's future as an independent firm has been in doubt since an earthquake and tsunami wrecked the plant in March, triggering the world's worst nuclear crisis in 25 years and leaving it with huge compensation payments and clean-up costs.

The full scale of any Tepco bailout remains unclear, with media carrying differing accounts of what is being considered.

Kyodo news agency said on Thursday the total bailout could reach 3 trillion yen ($38.5 billion) over four years, with half coming from private borrowings. The Mainichi newspaper said the government planned to inject at least $13 billion and perhaps as much as $27 billion but did not mention other fund-raising.

Some analysts expressed doubt that the government would take the drastic step of taking control of the giant monopoly, which has political clout despite the damage to its image from its handling of the Fukushima crisis.

Nationalisation would be a surprising development, politically very difficult and with the potential for serious aftershocks, said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus.

That said, the possibility of the government taking control has proponents in some sections of Japan's ruling party.

And Tepco President Toshio Nishizawa was mentioned as saying a public fund injection could not be ruled out. It is better to keep all options, so I don't deny it, Kyodo news agency quoted him as saying in an interview on Thursday.

Tepco has made progress in bringing the Fukushima plant under control and is on track to declare a cold shutdown -- when water used to cool the reactors is stable below boiling point -- before the end of the year.

But decommissioning four reactors at the plant is set to cost at least 1.2 trillion yen, a sum that would render Tepco insolvent if drastic measures to shore up its financial base were not taken, the media reports said.

You have an essentially bankrupt operation and if you are going to save it, it's going to cost a lot, said Andrew Dewit, a Rikkyo University professor who writes about energy policy.

You've got a very bad picture getting worse, and dithering just ups the cost.

ENERGY POLICY REFORM

The Mainichi said a government-run bailout fund would buy preferred shares to be issued by the utility.

Shares in Tepco slid as much as 17 percent before regaining some ground to end down 11 percent at 244 yen.

The report got investors worried that Tepco could possibly become insolvent, said Hiroyuki Fukunaga, CEO of Investrust. If they need 1 trillion yen to avoid that, then the money is not coming from anyone but the government.

Tepco would need to get shareholder approval to raise the ceiling on the number of shares it can issue at its next annual meeting in June.

To cover costs, Asia's biggest utility is pushing for hikes in electricity charges. It also wants permission to restart nuclear reactors, particularly those that have been idled at its biggest plant, Kashiwazaki-Kariwa.

Five of the seven reactors at that plant are off-line for checks or repairs and two more are scheduled for planned shutdowns before May 2012.

But the ruling party has concluded that the public would be unwilling to accept higher electricity fees, particularly at a time when it is being asked to accept a hike in the sales tax to cover social security costs, the Mainichi said, while restarting idled reactors is difficult due to public fears about safety.

Pushing Tepco to accept capital would also allow the government to pursue drastic reform of energy policy, including separating power generation from distribution, the paper said.

But experts questioned whether the two would necessarily go hand in hand. The government aims to finish a review of national energy policy, including nuclear power, by next summer.

Nationalisation could be a first step toward such reforms as splitting generation and distribution, said Rikkyo University's Dewit. But whether this is a trial balloon and gets shot down in the short-run, who's to say?

The Mainichi newspaper added that a government panel led by Chief Cabinet Secretary Osamu Fujimura could, in the new year, announce plans to inject public funds, although Fujimura told reporters the issue of public funds was not now on the table.

The government hasn't been debating this matter recently and at this point we are not scheduled to do so in the future, he said.

Tepco is due to announce new steps in the coming days, which include an increase in its planned cost cuts over 10 years by 100 billion yen to 2.64 trillion yen as well as the sale of a thermal power plant, a source has said.

($1 = 77.7300 Japanese yen)

(Additional reporting by Mayumi Negishi, Hideyuki Sano, Kentaro Hamada, Taiga Uranaka and Yoko Kubota; Editing by Alex Richardson and Muralikumar Anantharaman)