This paper presents a preliminary study on neutron physics characteristics of a light water cooled fission blanket for a new type subcritical fusion–fission hybrid reactor aiming at electric power generation with low technical limits of fission fuel. The major objective is to study the fission fuel cycling performance in the blanket, which may possess significant impacts on the feasibility of the new concept of fusion–fission hybrid reactor with a high energy gain (M) and tritium breeding ratio (TBR). The COUPLE2 code developed by the Institute of Nuclear and New Energy Technology of Tsinghua University is employed to simulate the neutronic behaviour in the blanket. COUPLE2 combines the particle transport code MCNPX with the fuel depletion code ORIGEN2. The code calculation results show that soft neutron spectrum can yield M > 20 while maintaining TBR >1.15 and the conversion ratio of fissile materials CR > 1 in a reasonably long refuelling cycle (>five years). The preliminary results also indicate that it is rather promising to design a high-performance light water cooled fission blanket of fusion–fission hybrid reactor for electric power generation by directly loading natural or depleted uranium if an ITER-scale tokamak fusion neutron source is achievable.