TORONTO - The Ontario government will need to learn from the nuclear crisis in Japan when building new power plants east of Toronto or deal with increased costs, a federal government-appointed review panel report released Thursday said.

The province is planning to build two new nuclear reactors at Ontario Power Generation's Darlington site. It hopes the new plants will eventually produce about one-twelfth of the province's energy supply.

The panel said concerns stemming from the crisis at the Fukushima Daiichi nuclear plant in Japan, which began leaking radiation following a tsunami in March, is likely to result in stiffer regulatory requirements.

Complying with any new requirements brought about by the crisis in Japan will lead to increased costs in building the plants, representatives from the province's crown corporation responsible for energy in the province, Ontario Power Generation, said during the hearings.

The province will have to foot the bill for the higher costs that would result if they have already signed a contract with someone to build the plants when those new regulations are introduced, the report said.

"The panel believes that it would be prudent for the government to ensure that lessons learned from Fukushima Daiichi nuclear accident and any resulting increased regulatory requirements are incorporated into the project as early as possible," the report reads.

Phone calls to the provincial government were not immediately returned.

Ontario Power Generation is keeping the possibility that new regulatory requirements will be coming in mind as they proceed with the project, a spokesman said.

"A lot of lessons from Fukushima are not completely understood yet," said Ted Gruetzner, manager of media relations at OPG.

"You would take what we have learned on our operating basis right now ... and then whatever lessons that you learn as you go forward you would incorporate those as you build the plant."

The panel's report concluded the project contained no major environmental risk and recommended the project be approved.

The move follows ongoing protests from environmentalists about the safety of the project.

Greenpeace protesters interrupted part of the panel's 17-day public hearing in March and April.

The hearings went ahead despite the environmentalists' concerns that the panel was ignoring safety questions raised by leaks at the Fukushima plant following the tsunami.

The federal Minister of the Environment and the president of the Canadian Nuclear Safety Commission appointed the independent panel to look at the potential environmental affects of the proposed project.

The panel has submitted the report to the federal Minister of the Environment. He will discuss the matter with the federal cabinet and it will be responsible for deciding whether or not government departments can start issuing licences for the project.