Which nuclear reactor blows up depends on the version of the game. In most versions, a reactor to the south blows up. In the SNES version, the reactor to the far east blows up. You cannot demolish the given Nuclear power plant in hopes of avoiding the disaster; it will simply occur at a different power plant located within the city. While you can try demolishing all Nuclear power plants, it will be expensive replacing them with Coal plants.
It's not possible to clean up the radiation, so just bulldoze the area and rebuild elsewhere. Try to do a good job, because you need a decent city score to win the scenario.