UPDATE 1-Japan blocks TCI attempt to boost J-Power stake

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TOKYO, May 13 (Reuters) - The Japanese government ordered British activist investor group TCI on Tuesday not to boost its stake in electricity wholesaler J-Power (9513.T: Quote, Profile, Research), making its stance official in a case seen as a test of how open Japan is to foreign investment.

The government had last month rejected The Children's Investment Fund's request to allow it to raise its stake in J-Power to 20 percent from 9.9 percent, citing national security and a potential disruption to the country's power supply.

The government's decision on Tuesday to upgrade its stance to an order was widely expected.

Japanese government officials have said they were concerned that a fund manager's short-term outlook could run counter to the public's best interest when planning investments in Japan's power network.

TCI, which has been urging J-Power to boost shareholder returns and to appoint external board members, had said it might take the Japanese government to court if its bid was blocked. (Reporting by Junko Fujita)