Toyota Motor Corp is preparing to recall its iconic Prius hybrid car to address more than 100 complaints about delayed braking, spreading the top automaker's quality woes to one of its most important models.

A source with knowledge of Toyota's discussions with Japanese safety authorities told Reuters on Friday the world's biggest automaker was leaning toward issuing a recall, even if the transport ministry does not technically consider the issue to be a safety hazard.

Toyota, which has earned a reputation as the front-runner in green technology by pioneering the gasoline-electric hybrid system with the first-generation Prius, has sold 311,000 units of the newest version to date, since its launch last May.

In what could be deemed a broader problem with hybrid cars, Ford Motor Co said on Thursday it would roll out a software patch for consumers to address similar problems with braking reported on its Ford Fusion and Mercury Milan models.

Customers have reported a split-second loss in braking power on both brands' hybrid cars when driving over bumpy or slippery roads, when a delay occurs in the switch from the hybrid's regenerative braking system to the traditional brakes.

Ford said it did not notify the public because it did not believe the glitch represented a failure of the brakes.

In Japan, Toyota's Prius is now the top-selling car, with sales of the latest model reaching around 200,000 units. Another 103,200 have been sold in the United States, where Toyota is also considering a repair.

Toyota said it was also looking into whether the software glitch exists in its other hybrid cars. There have been no complaints so far, a spokeswoman said.

SHARES DEFIANT

Shares in Toyota picked up from a 10-month low on Friday in Tokyo after it reported better-than-expected quarterly results and raised its outlook despite its growing recall-related problems.

It looks like some investors find Toyota shares attractive at current levels as the stock has fallen to about one times its price to book ratio, said Eiji Hakomori, analyst at Daiwa Securities Capital Markets.

The stock was up 1.1 percent at 3,315 yen in afternoon trade, defying a sharp drop in other auto stocks hit by the stronger yen.

The issues facing Toyota are not going to be solved that easily, said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. What we're seeing today is a technical rebound because it was sold so much.

The probe of the Prius, ordered in Japan and the United States as well as South Korea, comes amid a separate investigation into a problem with uncontrolled acceleration in the United States.

Toyota has launched the recall of more than 8 million vehicles worldwide for two separate problems with the accelerator pedal not returning properly. One of the problems has led to five deaths in two incidents, according to U.S. safety authorities.

Toyota said on Thursday that those recalls would cost it up to $2 billion at the operating level in the financial year to March 31.

Morgan Stanley analyst Noriaki Hirakata said in a note to clients he estimated related expenses for the Prius fix to come to about 3 billion yen ($33.5 million).

(Reporting by Nobuhiro Kubo, Chang-Ran Kim, Yumiko Nishitani and Elaine Lies)

Japan Toyota Recall