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* RWE to pay special div of 1 euro per share for 2017
* Special div comes on top of ordinary div of 0.50 euros
* To pay out 615 mln euros of total 1.7 bln reimbursement
* CEO says special div is "fair and appropriate"
* Shares down 1.8 pct at bottom of DAX (Adds CEO quote, background, unchanged full-year 2017 forecast)
FRANKFURT, June 23 (Reuters) - German utility RWE said it would pay out to shareholders more than a third of the money it is getting back from the nuclear fuel tax, extending an olive branch to investors disappointed by two years of suspended dividends.
It said in a statement on Friday it would pay its shareholders a special dividend of 1 euro ($1.12) per share for 2017, on top of a planned ordinary payout of 0.50 euros per share.
Germany's top court earlier this month declared the country's nuclear fuel tax to be illegal, a major victory for power firms now poised to reclaim about 6.3 billion euros ($7.03 billion) plus interest and ease the strain on their balance sheets.
The decision creates a windfall for RWE and its peers E.ON and EnBW, which were hit hard by German Chancellor Angela Merkel's swift decision to exit nuclear power by 2022, a move prompted by the disaster at Fukushima, Japan, in March 2011.
For RWE, the ruling means a reimbursement of around 1.7 billion euros. The special dividend will account for around 615 million of that.
"We are aware that we asked a lot of our shareholders by suspending the dividend on common shares in the last two years," Chief Executive Rolf Martin Schmitz said.
"We feel it is both fair and appropriate to distribute part of the tax refund among our shareholders," he added.
The group will use the rest of the reimbursement to improve its financial strength, finance chief Markus Krebber said.
The tax refund will not affect RWE's operating earnings forecast as it will be recognised in its non-operating results, RWE said. ($1 = 0.8949 euros) (Reporting by Maria Sheahan; Editing by Victoria Bryan)