The reactor, which celebrates its 30th anniversary of first generating power tomorrow, is not expected to return to service until the end of the month.
The sudden disruption to nuclear power generation on safety grounds shows the financial risks involved in the Government's plans to privatise the industry.
Dungeness's managers took the reactor offline for checking even though they believe that it is intact and undamaged.
Harried executives yesterday denied that there were any parallels to an accident at Wylfa nuclear power station which led last week to Nuclear Electric being fined a record pounds 250,000 for breaches of safety rules.
However, both incidents involved damage to the machines which are used to refuel the reactors while they are still generating power.
The Nuclear Installations Inspectorate (NII) has already completed a preliminary investigation into the incident. A spokesman said: "We are satisfied so far with Nuclear Electric's actions following the discovery of the problem."
Both Wylfa and Dungeness are of the elderly, first-generation Magnox type. The Government has decided not to privatise the Magnoxes, because they have only a short operational lifetime left and the cost of reprocessing their fuel and decommissioning them at the end of their lives is prohibitive. Only the more modern, advanced gas-cooled reactors and the Sizewell pressurised water reactor are to be sold off.
Although the Magnox reactors are old, they were subject to "long-term safety reviews" by the inspectorate to verify that there were no age-related factors which could compromise their safety. The review of Dungeness was published last year and permitted its operation to 1996, when a further review will be undertaken, the NII said yesterday.
Station management decided to take the Dungeness reactor out of service on 6 September after they realised that the fuelling machine had been damaged to check for any damage to the reactor itself.
The incident took place at the beginning of the month when operators were preparing to refuel the reactor.
The procedure involves positioning the 400-tonne fuelling machine on top of the reactor and lowering a "chute headbox" on top of one of the thousands of sealed standpipes or vertical channels containing the fuel. Once the headbox has made a gas-tight seal, the cap on the standpipe is removed, making the fuelling machine temporarily part of the reactor and vital to keeping the pressurised carbon dioxide gas inside.
At Dungeness, the fuelling machine was moved an inch or so while the headbox was connected but before the cap had been removed. Because the machine was not yet pressurised, the interlocks to stop it moving had not been deployed.
The operators took the machine away and, on examining the headbox, found that it was dented. However the reactor was still intact and there was no leakage of gas from the standpipe.
Closed circuit television cameras have already been sent down and have not revealed any damage, while ultrasonic inspections will now be carried out on the reactor as a further precaution.Reuse content