Through the analysis of different fault characteristics under single-phase earth fault for transmission lines with shunt reactors，a permanent fault identification method based on least squares waveform correlation is presented.The equivalent model of voltage recover interval of transient fault is used as a reference prototype，the similarity of calculated value and measured value on fault-phase terminal voltage is obtained with time domain waveform correlation method，and then identifies the fault nature by continuously comparing objective proportional coefficient constructed with the similarity to setting value.The method can identify fault nature just with the current of shunt reactors and single-terminal data of non-fault-phase.Lots of simulation results show that the proposed method can exactly distinguish permanent fault from transient fault on different conditions，even in comparatively large model parameter errors case can achieve the goal of reliable misalignment in permanent fault.