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TOKYO, Oct 4 (Reuters) Japan's Toshiba Corp. said on Wednesday it would take a 77 percent stake in Westinghouse, British Nuclear Fuels' U.S. power plant unit, for $4.16 billion, buying a much bigger chunk of the firm than it initially planned.

Toshiba in February agreed to buy Westinghouse for $5.4 billion as part of a consortium, in which it wanted to take a stake of 51 percent or just a little more, but Toshiba's stake grew after it failed to get Japanese trading firm Marubeni Corp.

to invest.

The Tokyo-based company said on Wednesday that U.S.

engineering firm Shaw Group Inc. will take a 20 percent stake for $1.08 billion, while Ishikawajima-Harima Heavy Industries Co.

Ltd. is set to take the remaining 3 percent.

''The Westinghouse acquisition is an attractive business with much promise, and we considered it, but decided against investing,'' a Marubeni spokesman said.

Toshiba will turn to bank borrowings for the deal, slated to close by the end of the month, and has no plans for equity financing, Toshiba spokesman Keisuke Ohmori said.

Toshiba's stake in Westinghouse could become smaller than 77 percent in the future as it is still negotiating with a few companies for a minority stake in the firm, he said.

But even so, it's hard to imagine another investor taking much more than a 3 or 4 percent stake, said JP Morgan Securities Japan's analyst Yoshiharu Izumi.

''In the short-term, this will be a negative for Toshiba shares, but the additional cost is small for Toshiba over the longer term,'' he said.

The purchase makes Toshiba the world's largest nuclear reactor maker in terms of power-generating capacity, and the company expects to recover the investment within 15 to 20 years on increased orders from the U.S. and China for pressurised water reactors amd boiling water reactors.

''Toshiba's cash flow this year is in good shape, thanks to robust business in NAND flash memory chips,'' said Tatsuya Mizuno, director at credit ratings firm Fitch Ratings. ''But what happens in the next few years, if NAND prices fall faster than Toshiba thinks?'' Nor is it clear Toshiba will be able to get the orders necessary to recover such a big investment, he said.

''Westinghouse's expertise in the U.S. has been in maintenance of nuclear power plants, not construction of new ones. And if interest rates go up, that could be a significant burden on Toshiba's balance sheet,'' Mizuno said.

Nuclear power fell out of favour after the Chernobyl disaster in 1986, and the industry has been dogged by concerns about the financial and environmental costs of dealing with radioactive waste. But it has recently returned to the fore.

Concern over the security of power supplies and growing demand worldwide for energy have fuelled a surge in crude oil prices, prompting fuel-hungry countries such as China to expand investment in other energy sources including nuclear power.

Toshiba, the world's fourth-largest microchip maker, is also investing heavily to ramp up capacity to make NAND chips, and the Westinghouse purchase has raised concerns that the company might be spreading its resources too thin.

The price tag for Westinghouse rose to triple initial expectations after Toshiba outbid General Electric Co. and Japanese heavy machinery maker Mitsubishi Heavy Industries Ltd., in an ongoing race to gain a technological edge in the increasingly competitive nuclear power market.

Prior to the announcement, shares in Toshiba closed down 1.2 percent at 763 yen, roughly in line with the Tokyo stock market's electrical machinery index IELEC.

REUTERS DKS HS1941