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Wireless sensor networks (WSN) are inherently fault- prone due to the shared wireless communication medium and harsh environments in which they are deployed. Energy is one of the most constraining factors and node failures due to crash and energy exhaustion are commonplace. In order to avoid degradation of service due to faults, it is necessary for the WSN to be able to detect faults early and initiate recovery actions. In this paper we propose a localized cluster based method for fault detection and network connectivity recovery which is energy efficient and responsive. Extensive simulations show that our proposed algorithm with cluster size 20 enables the network to recover from faults in one fourth of the time consumed by fault tolerant clustering method (Gupta algorithm). Our proposed method is also shown to consume less energy than crash faults identification method. The proposed algorithm lends well to the continuous operation and maintenance of robust sensor networks.