The Japanese government plans to take a stake of more than two-thirds in Tokyo Electric Power Co <9501.T> in a de facto nationalization of the operator of the crippled Fukushima nuclear power plant, the Yomiuri newspaper said on Wednesday.
Sources said this month that the government may inject about $13 billion into Asia's biggest utility as early as next summer in a de facto nationalization.
The Yomiuri also reported that the government is looking at injecting 1 trillion yen ($12.7 billion), and added that banks will be asked to provide 1 trillion yen in loans, citing sources familiar with the matter.
A Tepco spokeswoman said the report was not factual.
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 Yomiuri said full-scale negotiations for the government to acquire classified stock in Tepco, a category that includes preferred shares, will begin next year, with related parties aiming to complete them by next March.
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.
Last Friday, Japan declared a cold shutdown at the disaster-hit Fukushima Daiichi plant, but it still faces a massive cleanup task at the nuclear complex located 240 km (150 miles) northeast of Tokyo.
Decommissioning four reactors at the plant is set to cost at least 1.2 trillion yen, a sum that would render the power company insolvent if drastic measures to shore up its financial base were not taken, media reports have said.
Tepco is holding a meeting later on Wednesday about its roadmap for decommissioning the plant.
Shares in Tepco fell 6 percent in early morning trade, versus an 1.5 percent rise in the benchmark Nikkei 225 <.N225>.
($1 = 77.7400 Japanese yen)
(Reporting by Nobuhiro Kubo and James Topham; Editing by Edwina Gibbs)