The Cabinet said it would only take the policy report "into consideration" and would seek public support for its recommendations. The public, in this case, includes the general population as well as the nuclear industry, other business interests, and communities near nuclear plants that rely on them economically.
National Policy Minister Motohisa Furukawa said the focus of Japan's energy policy continues to be the phasing out of nuclear power, although it would take time. Furukawa vowed to push for green energy and for cuts in carbon dioxide emissions.
The Cabinet's ambiguous endorsement added to criticism that the policy revision may be aimed at winning votes in elections expected within the next few months.
Business leaders praised the Cabinet's perceived backpedaling.
"It seems that (the Cabinet) did not mention specific targets such as 2030s or zero percent, so I assume we can avert the problem for the time being," said Masahiro Yonekura, chairman of the influential business lobby Keidanren. On Tuesday, Yonekura called the phase-out plan "totally unacceptable" and threatened to quit a government panel if it were adopted.
The decision still represents a shift for a government that until recently was considering a plan for nuclear power to continue to supply up to 25 percent of the country's energy needs through the 2030s.
"At least the policy showed the direction we should be heading," said Hideyuki Ban, co-head of anti-nuclear Citizens' Nuclear Information Center, who served on a government nuclear energy policy panel. "But the level of commitment has been weakened, and the plan has lots of holes ... It's obvious there was tremendous pressure from businesses."
Nuclear power provided about a third of the country's electricity before the March 11, 2011, accident at the Fukushima plant, and Japan had planned to increase that to 50 percent. Currently only two of the country's 50 functioning reactors are on line while the government addresses public concerns about safety.
The new regulatory agency, the Nuclear Regulation Authority, inaugurated Wednesday was delayed for months by demands from opposition lawmakers for more independence and by criticism of the pro-nuclear background of some appointees. The five-member agency is headed by nuclear physicist and Fukushima native Shunichi Tanaka, a former executive of the Japan Atomic Energy Agency, which promotes nuclear energy.
Tanaka, 67, has helped decontaminate areas around the Fukushima plant that were exposed to radiation. But some residents criticize him for downplaying the potential risk of low-dose radiation exposure.
The four other committee members are a former JAEA official, a radiation expert, a seismologist and a former diplomat who took part in a parliamentary investigation into the Fukushima crisis.
Prime Minister Yoshihiko Noda made the appointments without going through required parliamentary approval to meet the committee's Sept. 26 launch deadline, prompting widespread public protests.
The new agency combines the former regulator Nuclear Industrial and Safety Agency, the Nuclear Safety Commission and several other nuclear-related government departments. It is attached to the Environment Ministry to distance it from promoters of nuclear energy. NISA was part of the industry ministry, which advocates nuclear power.
Several investigations have said collusion between regulators and the utility that ran Fukushima contributed to the worst nuclear disaster since Chernobyl.
"Our foremost task is to seek how to rebuild the country's administration for nuclear safety and regain the public trust that has been completely lost," Tanaka said at the new agency's first meeting.
The energy policy recommended last Friday by the Cabinet advisory panel calls for a nuclear-free society by 2040. The phase-out was to be achieved by retiring aging reactors and not replacing them. It also calls for limiting each reactor to a 40-year lifespan, though a 20-year extension can be granted as an exception.
That approach is popular with the public, but faces strong resistance from powerful business interests. Communities where nuclear plants are located are also loath to give up their huge government subsidies.
To blunt outright opposition, the energy plan left many details undecided, including the processing of spent fuel and disposal of radioactive waste. That allows a fuel recycling program at a plant in northern Japan to continue and leaves unanswered how Japan will avoid accumulating stockpiles of spent plutonium in violation of non-proliferation commitments.