The Japanese government on Wednesday raised "maximum alert" after radioactive water has been found and plutonium was detected in the soil around areas near a crippled nuclear power plant.

It was reported that the level of radioactive iodine in the sea off Fukushima reached its highest level at 3,355 times the legal limit.

Prime Minister Naoto Kan has admitted that the situation remains unpredictable near the coastal atomic power station but vowed that his government would "tackle the problem while in a state of maximum alert".

An estimated 28,000 people were feared dead or missing after a powerful quake followed by a tsunami destroyed most of Japan's northeast coast. The twin disasters also damaged the reactor cooling systems at the Fukushima plant, which leaked radiation into the air and sea.

Workers have been pouring thousands of tons of water onto reactors where engineers fear fuel rods have partially melted. But the contaminated water has accumulated in the basements of turbine rooms connecting the reactors and filled up tunnels. Experts said the situation has made it dangerous for workers to continue repairing the cooling systems crucial to stabilize the plant.

Government spokesman Yukio Edano said workers would continue to pump water onto the reactors despite an estimated 6,000 cubic metres (212,000 cubic feet) of contaminated water have accumulated in one tunnel.

"Continuing the cooling is unavoidable... We need to prioritise injecting water," Edano told reporters.

Nuclear experts warned of a grimmer scenario should the rods are exposed to the air which will caused rapid heating up and melt resulting to the spewing of far greater plumes of radiation at the site.

Last week, the operator of the damaged plant, Tokyo Electric Power Co. (TEPCO), said it detected plutonium in soil samples in at least five spots around the plant.

The presence of plutonium is an indication of "certain damage to fuel rods," nuclear safety agency spokesman Hidehiko Nishiyama said.