TOKYO, March 18 (Reuters) - A reactor in southwestern Japan cleared another regulatory hurdle on Wednesday, another small step in Japan's return to nuclear power after all units were shut down for stringent safety checks following the 2011 Fukushima atomic disaster.

The Nuclear Regulation Authority (NRA) said the No. 1 reactor at Kyushu Electric Power Co's Sendai plant had received approval for construction works upgrading the unit's basic design to meet higher standards set since Fukushima.

The approval brings Kyushu Electric a little closer to the start-up and Japan's government is aiming to start the first reactor by around June, sources familiar with the plans have told Reuters.

Further hurdles remain, as courts are considering injunctions to prevent restarts of all the country's nuclear power stations.

The NRA's consent on Wednesday was the second in a three-step process that all reactors have to go through before they will be allowed to restart. A final inspection in advance of a restart is also required.

The Sendai plant received the first approval, the most important step, in September.

As Japan inches towards ending its longest stretch without nuclear power since it ramped up construction of reactors from the 1960s, utilities this week are also taking moves to close older units that are too expensive to upgrade.

Kyushu Electric said on Wednesday it would decommission its nearly 40-year-old Genkai No. 1 reactor. Chugoku Electric Power Co also said on Wednesday it would do the same with the No. 1 unit at its Shimane plant, which is 41 years old.

Utilities on Tuesday announced plans to decommission three old units.

That brings to 43 the number of reactors that are considered operational, down from 54 before an earthquake and tsunami set off meltdowns at Tokyo Electric Power's Fukushima Daiichi plant in March 2011.

As many as two-thirds of the country's reactors may never return to operation because of high costs, local opposition or seismic risks, a Reuters analysis showed last year.

Kansai Electric Power Co on Tuesday said it submitted requests to restart the No. 1 and 2 reactors at its Takahama plant and the No. 3 unit at its Mihama station.

These submissions will test the waters for extending the life of plants beyond the initial 40 years allowed as they were all built in the 1970s.


(Reporting by Kentaro Hamada and Yuka Obayashi; Writing by Aaron Sheldrick; Editing by Jacqueline Wong)