Japan's panel of experts is due to review the nuclear watchdog's first report on reactor stress tests on Wednesday in an important step in efforts to rebuild public trust shattered by the Fukushima crisis and restart idled reactors.

An official at the Nuclear and Industrial Safety Agency (NISA) told Reuters it is preparing a report on its findings based on tests run by Kansai Electric Power Co on its Ohi on its No.3 and No.4 reactors. The panel's approval would pave the way for further review by Japan's Nuclear Safety Commission, Prime Minister Yoshihiko Noda and relevant cabinet ministers.

We're organising data and findings from the past discussions of stress test reports, aiming to discuss mainly the No.3 and No.4 Ohi reactors on January 18, a NISA official said.

He said the panel was also expected to look into other test results on Wednesday. Those tests, which NISA will later assess based on suggestions from the panel, concern Hokkaido Electric Power's Tomari No.1 and No.2 units and Shikoku Electric Power's Ikata No.3 unit.

The Nikkei newspaper said over the weekend that the watchdog would accept the results of the tests for Kansai's two Ohi reactors, but the official, who declined to be named because he is not authorised to talk to the press, would not confirm the report.

He said the panel could request more information before approving the watchdog's recommendations.

A go-ahead for the two reactors in Japan's western industrial heartland would mark a symbolic breakthrough in the government's and utilities' efforts to avert a total nuclear power shutdown before the next peak summer demand season.

The government ordered the stress tests -- computer simulations of how reactors would withstand severe shocks such as the magnitude 9.0 earthquake and tsunami that ravaged Japan's northeast on March 11 -- to overcome public opposition to restarting of reactors taken offline for regular checks.

But even after reactors win a clean bill of health from safety watchdogs and the government -- a process Industry Minister Yukio Edano has said could take several months -- the utilities will still need to win over sceptical local communities, which have demanded more assurances about nuclear power plants' safety.

Before the meltdowns at the Tokyo Electric Power's crippled Fukushima plant that triggered the world's worst nuclear crisis in 25 years, nuclear power covered about a third of Japan's electricity demand.

The government is now debating a new energy strategy that will probably entail a gradual shift away from nuclear power and a greater role for renewable, clean energy sources. But it is also keen to bring existing reactors back in operation to avert a power crunch and ease the immediate economic impact.

Now, only five reactors out of a total of 54 remain online, prompting utilities to import and burn more fossil fuels to fill the gap at a higher cost to customers and the economy.

The maintenance schedule means that all reactors will be offline by late April if stress tests, a planned reorganisation of the nuclear watchdogs and utilities' additional safety steps fail to convince the public.

NISA has said it could ask a utility to run stress tests again if findings of new seismic or other risks to reactors emerged.

(Editing by Tomasz Janowski)