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Japan establishes compensation plan for nuclear disaster

By the CNN Wire Staff
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Lending a hand to Japan quake survivors
  • Some analysts say total compensation could amount to more than 10 trillion yen
  • A government-backed fund will allow the nuclear plant operator to avoid bankruptcy
  • A March 11 earthquake and tsunami lead to the nuclear disaster
  • Some families have received a 1 million yen down payment

(CNN) -- The Japanese government announced a compensation plan for the victims affected by the accident at Fukushima Daiichi Nuclear Plant Friday.

The deal will provide long-awaited compensation to tens of thousands evacuees who hurriedly left their home towns after the March 11 incident that spewed radiation across the region, according to a government announcement.

A government-backed fund will allow plant operator Tokyo Electric Power Co. to avoid bankruptcy and remain in operation, while funding the compensation plan.

The Japanese government said it will issue special purpose bonds, provide credits and ask other nuclear power operators to contribute to the fund.

Many of the more than 78,000 displaced by the disaster have spent two months living in government shelters -- sometimes just gyms. Tokyo Electric has made a down payment on compensation of 1 million yen (about $12,000) per household to some families.

Some analysts say total compensation could amount to more than 10 trillion yen ($124 billion).

The government has set no ceiling on the compensation and Tokyo Electric will be required to pay back the money spent out of the fund.

The shadow cast by Fukushima Daiichi has inflicted yet-unknown losses on farmers, fishermen and shopkeepers. And looming compensation costs have darkened the future of Tokyo Electric, a $157 billion company that could still be driven into some form of government receivership by the nuclear disaster.

The compensation plan announcement comes as the nuclear plant operator is still struggling to stabilize the crippled nuclear reactors.

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