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People on vacation fish as the Japan Atomic Energy Agency's Monju nuclear power plant, a sodium-cooled fast reactor, is pictured in the background in Tsuruga, Fukui prefecture, July 2, 2011. REUTERS/Issei Kato

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TOKYO (Reuters) - Japan is mulling decommissioning its troubled Monju prototype fast-breeder reactor, following 1 trillion yen (7.35 billion pounds) in outlays on the controversial project over more than two decades with no results, the Asahi newspaper said on Wednesday.

The possible move comes ten months after Japan's nuclear regulator declared the operator of Monju unfit following years of accidents, missteps and falsification of documents.

The science minister in charge of Monju has been considering creating a new entity to run the breeder reactor, but the government thinks it would be difficult to gain public support to spend another several hundreds of billions of yen to upgrade the facility for a restart, Asahi said, citing unnamed sources.

The government hopes to decide on a course of action on the issue before the Diet - Japan's parliament - reconvenes on Sept. 26, the newspaper said.

The science minister in charge was not immediately available for comment. Japan Atomic Energy Agency, the Monju operator, declined to comment.

Monju is a prototype fast-breeder reactor that produces plutonium from spent nuclear fuel. The facility, located on the Sea of Japan coast 400 km west of Tokyo, was aimed at playing a key role in energy-starved Japan's fuel recycling programme.

But numerous safety issues, including leaks of sodium coolant, have kept the reactor inoperative for much of the time since it first achieved criticality in 1994.

With all but three of Japan's 42 commercial reactors still shut as a result of the 2011 Fukushima disaster, there is little meaning to the costly exercise of extracting more plutonium from spent fuel, critics say.

(Reporting by Yuka Obayashi; Editing by Tom Hogue)

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