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Nuclear Cleanup Goes to Taxpayer, May Spur Liability Shift

Japan’s taxpayer, not the nuclear industry or insurers, will cover most of the cleanup cost from the worst accident since Chernobyl, a financial rescue that may spur moves by nations to make companies assume more liability.

Tokyo Electric Power Co., in its 13th day fighting to avert a meltdown at its Fukushima plant 220 kilometers (135 miles) north of Tokyo, at most is required to cover third-party damages of 120 billion yen ($2.1 billion) under Japanese law. Should the government declare the magnitude-9 earthquake and tsunami that flooded its reactors an “exceptional” act of God, the utility may be off the hook in paying compensation that may be demanded by injured workers, farmers and shareholders.