* Three former executives cleared of negligence for 2011 disaster
* Case was only criminal filing brought after nuclear meltdown
* Displaced residents and protesters gathered outside court
* 2012 commission said Fukushima was "profoundly manmade disaster" (Adds bullet points, recasts headline)
By Tim Kelly and Aaron Sheldrick
TOKYO, Sept 19 (Reuters) - A Tokyo court cleared on Thursday three former Tokyo Electric Power (Tepco) executives of negligence for the 2011 Fukushima disaster, the only criminal case to arise out of the world's worst nuclear crisis since Chernobyl in 1986.
Former Tepco Chairman Tsunehisa Katsumata and one-time executives Sakae Muto and Ichiro Takekuro were all found not guilty by the Tokyo District Court. Dressed in dark suits and ties, the defendants sat in silence as Presiding Judge Kenichi Nagafuchi read the judgment.
A woman sitting in the public gallery, where about 100 people were seated, shouted "unbelievable", on hearing the verdict. Outside the court were displaced residents and protesters.
The trial, which started in June 2017, was conducted by state-appointed lawyers after prosecutors decided not to bring charges. Legal experts had said it was unlikely the three former executives of Japan's biggest power provider would be found guilty, given prosecutors had decided not to take the case to trial.
The Fukushima Daiichi nuclear station, located about 220 km (130 miles) northeast of Tokyo, was rocked by a magnitude 9.0 earthquake and subsequent tsunami in March 2011, sparking three reactor meltdowns and prompting Japan to shut down its entire fleet of nuclear reactors.
More than 160,000 residents fled nearby towns in the aftermath as radiation from the reactors contaminated water, food and air.
Lawyers acting as prosecutors said the three executives had access to data and studies anticipating the risk to the area from a tsunami exceeding 10 metres (33 feet) in height that could trigger a power loss and cause a nuclear disaster.
Judge Nagafuchi ruled that to hold the executives responsible for criminal negligence the prosecuting lawyers had to prove it was possible to predict tsunamis.
Nagafuchi said that, while the executives may have been aware of the risk of a major tsunami before the disaster, it was not established that they could have completed preventative measures in time.
A commission appointed by Japan's parliament concluded in 2012 that Fukushima "was a profoundly manmade disaster – that could and should have been foreseen and prevented, (while) its effects could have been mitigated by a more effective human response."
In 2016, the government estimated the total cost of plant dismantling, decontamination of affected areas and compensation would be 21.5 trillion yen ($199 billion), or about a fifth of Japan's annual budget.
Prosecutors cited insufficient evidence when declining to bring charges, but a civilian judiciary panel twice voted to indict the executives, overruling the determination not to go to trial.
Citizen judiciary panels, selected by lottery, are a rarely used feature of Japan's legal system introduced after World War Two to curb bureaucratic overreach. ($1 = 107.9300 yen) (Reporting by Tim Kelly; Writing by Aaron Sheldrick; Editing by Muralikumar Anantharaman and Christopher Cushing)