OTTAWA - An expert panel is recommending that the federal government build a new nuclear reactor to produce medical isotopes and guarantee an adequate supply for the country.

The Expert Review Panel On Medical Isotope Production says the best way to keep isotopes stocked is to build a new research reactor to replace the downed unit at Chalk River, Ont.

It makes the recommendation in a report to Natural Resources Minister Lisa Raitt, which the government received Monday and released Thursday.

"We recommend that the government expeditiously engage in the replacement of the (National Research Universal) reactor as we believe a multipurpose research reactor represents the best primary option to create a sustainable source of (the isotope molybdenum 99), recognizing that the reactor's other missions would also play a role in justifying the costs," the report says.

The Conservatives convened the panel in May to assess proposals for new sources of medical isotopes.

Raitt wasn't immediately available for comment, but Prime Minister Stephen Harper has said Canada may have to get out of the medical isotope business.

The Chalk River reactor supplied a third of the world's medical isotopes until Atomic Energy of Canada Ltd. shut it down in mid-May after it found a pinprick-sized radioactive water leak.

The reactor was supposed to be down for a month, then three months, and now AECL's best guess is the reactor won't be back up until the first quarter of next year.

It has fallen to a handful of other reactors around the world built a half-century ago to supply the isotopes used to diagnose cancer and heart ailments.

Doctors have been scrambling to make do with an erratic supply of medical isotopes since Chalk River's shutdown. That's forced them to rely on alternatives to medical isotopes.

The expert panel says a new research reactor is not only the best option for a sustainable supply of isotopes, but also for a host of spin-off benefits.

"Of all the technology options, this one has the highest potential for concomitant benefit to Canadians based on the promise of the broad-based research that would be undertaken, and its associated potential for generating intellectual property, job creation and training," the report says.

Building a new reactor is the priciest option on the table. Revenue from making isotopes would only offset about 10 to 15 per cent of the reactor's costs, the report says. But it says that with the 52-year-old Chalk River reactor on its last legs, the federal government is up against the clock to make a decision on its future in the isotope business.

The report also recommends that Ottawa look more closely at building cyclotrons, or particle accelerators, to produce isotopes. It says cyclotrons may be the timeliest option, with commercial production of isotopes potentially beginning between 2011 and 2014, depending on research and development and regulatory issues.

The panel took a dim view of restarting a pair of mothballed reactors.

AECL scrapped two MAPLE reactors last year due to design flaws. The MAPLEs were meant to replace the NRU reactor. They were millions of dollars over budget and years behind schedule when the Tories pulled the plug.

The expert panel says while it may be possible to get the MAPLES up and running, "the ongoing revenues from isotope sales would be insufficient to cover the ongoing operating expenses."