Japan’s Cabinet on Wednesday refrained from endorsing a much-awaited, controversial recommendation made just days before by an advisory panel urging Japan to seek to close all its viable nuclear reactors by 2040 and increase its reliance on renewable energy, energy efficiency, and fossil fuels.

The “Innovative Energy and Environment Strategy,” announced by Minister of State for National Policy Motohisa Furukawa on Sept. 14, calls for a ban on new reactors, though it leaves open the possibility that seven reactors at varying stages of construction in Japan could be completed. The government also said exemptions could be granted to its policy that reactors be shuttered after their 40-year lifespans, suggesting the deadline to phase out nuclear power was flexible.

But on Wednesday, Prime Minister Yoshihiko Noda’s cabinet said it would take the policy report “into consideration” while saying it would “engage in debate with local governments and international society to gain public understanding” in deciding Japan’s energy future. The qualified approval “left ample leeway for its future reversal,” wrote Japanese newspaper The Asahi Shimbun.

The recommended strategy released on Friday was attacked by both anti-nuclear groups, who said the phase-out deadline was too long and had too many loopholes, and business groups, which said it would hurt the country’s economy by jeopardizing its energy future.

The decision would bring “numerous and expensive challenges” for Japan’s energy policy, said Federation of Electric Power Companies (FEPC) Chair Makoto Yagi, though he noted the group representing 10 of Japan’s largest utilities had not analyzed the strategy entirely.

“Aiming at zero nuclear power means that we will face very serious challenges which include an outflow of national wealth by increased fossil fuel imports, higher electricity rates, global warming issues, and maintaining the required human resources for operating Japan’s nuclear power facilities,” Yagi said. “Above all, the zero nuclear policy would break the trust of communities hosting nuclear facilities.”

Yagi criticized the policy decision as ignorant of the impact it would have on utilities. “Therefore, we strongly ask that the Government of Japan address challenges, and also review the practicality of the new energy policy.”

Before the 9.0-magnitude temblor and ensuing tsunami debilitated the Tokyo Electric Power Co.’s (TEPCO’s) Fukushima Daiichi nuclear plant and prompted the shutdown of the nation’s remaining 50 viable reactors, Japan procured about 26% of its power supply from nuclear. About 9% came from hydropower, 1% from renewables, and 61% from coal, oil, and liquefied natural gas.

Japan—a country that imports more than 95% of its energy needs—had been grappling with the best means by which to simultaneously achieve what it termed the three E’s: energy security, environment and climate mitigation (being a signatory of the Kyoto Protocol), and economic efficiency. The solution presented by its last Basic Energy Plan, approved in 2010, was to double its share of renewables and massively expand the nuclear component of its energy mix to reach 41% of total power supply by 2017, and 53% by 2030. Plans were in place to construct nine new reactors by 2020 and another five by 2030.

Japan went nuclear-free for a brief period after Fukushima between shutdown of the last operating reactor this May for inspection and the restart of Ohi Units 3 and 4 early in July. During that period, utilities that had previously relied heavily on nuclear power, like Kansai EPC and Tokyo EPC, strained to meet normal year demand peaks, and as it had in 2011, the government also stepped in, compelling forced power savings by invoking the Electricity Business Act.

Even though Ohi Units 3 and 4 have been restarted, the energy situation is expected to “remain tight in 2012,” said the Institute of Energy Economics (IEEJ) this August, which noted this could have many repercussions, such as “unpredictable supply-demand situation of electricity, outflow of national wealth, rising electricity costs, and increasing carbon emissions.”

Fukushima’s aftermath in the country’s electricity timeline has been a critical shaper of what scenarios were considered by the Energy and Environment Council in its revision of the 2010 Basic Energy Plan. Eventually, three primary generation mix options were agreed to before the National Policy Unit made its announcement on Friday: a zero scenario, with nuclear power at 0% and renewable energies at 35%; the 15 scenario, with nuclear at 15% and renewables at 30%; and the 20-25 scenario, with nuclear ranging between 20% and 25%, and renewables ranging between 25% and 30%. The options were deliberately simplified “to facilitate national debate.”