The invention relates to the use of Dispersion Ceramic Micro-Encapsulated (DCM) nuclear fuel as a meltdown-proof, accident-tolerant fuel to replace uranium dioxide fuel in existing light water reactors (LWRs). The safety qualities of the DCM fuel are obtained by the combination of three strong barriers to fission product release (ceramic coatings around the fuel kernels), highly dense inert ceramic matrix around the coated fuel particles and metallic or ceramic cladding around the fuel pellets.