In a nationally televised statement, Prime Minister Naoto Kan said radiation has spread from four reactors of the Fukushima Dai-ichi nuclear plant in Fukushima province, one of the hardest-hit in Friday's 9.0-magnitude earthquake and the ensuing tsunami that has killed more than 10,000 people.
"The level seems very high, and there is still a very high risk of more radiation coming out," Kan said. "We are making utmost efforts to prevent further explosions and radiation leaks."
This is the worst nuclear crisis Japan has faced since the atomic bombing of Hiroshima and Nagasaki during World War II. It is also the first time that such a grave nuclear threat has been raised in the world since a nuclear power plant in Chernobyl, Russia exploded in 1986.
Kan warned there are dangers of more leaks and told people living within 19 miles (30 kilometers) of the Fukushima Dai-ichi complex to stay indoors to avoid radiation sickness. Some 180,000 people had already been evacuated from a 12-mile (20-kilometer) radius and it was not immediately clear how many people live in the outer radius for which the new warning was issued.
Three reactors at the power plant were in critical condition after Friday's quake, losing their ability to cool down and releasing some radiation. A fourth reactor that was unoperational caught fire on Tuesday and more radiation was released, Chief Cabinet Secretary Yukio Edano said.
The fire was put out. Even though it was unoperational, the fourth reactor was believed to be the source of the elevated radiation release because of the hydrogen release that triggered the fire.
"It is likely that the level of radiation increased sharply due to a fire at Unit 4," Edano said. "Now we are talking about levels that can damage human health. These are readings taken near the area where we believe the releases are happening. Far away, the levels should be lower," he said.
"Please do not go outside. Please stay indoors. Please close windows and make your homes airtight. Don't turn on ventilators. Please hang on your laundry indoors," he said.
"These are figures that potentially affect health, there is no mistake about that," he said.
He said a reactor whose containment building caught fire Monday has not contributed greatly to the increased radiation. The radiation level around one of the reactors stood at 400,000 microsiverts per hour, four times higher than the safe level.
Officials said 50 workers were still there trying to put water into the reactors to cool them. They say 800 other staff were evacuated. The fires and explosions at the reactors have injured 15 workers and military personnel and exposed up to 190 people to elevated radiation.
The death toll from last week's earthquake and tsunami jumped Tuesday as police confirmed the number killed had topped 2,400, though that grim news was overshadowed by a deepening nuclear crisis. Officials have said previously that at least 10,000 people may have died in Miyagi province alone.
Millions of people spent a fourth night with little food, water or heating in near-freezing temperatures as they dealt with the loss of homes and loved ones. Asia's richest country hasn't seen such hardship since World War II.
Hajime Sato, a government official in Iwate prefecture, one of the hardest-hit, said deliveries of supplies were only 10 percent of what is needed. Body bags and coffins were running so short that the government may turn to foreign funeral homes for help, he said.
Though Japanese officials have refused to speculate on the death toll, Indonesian geologist Hery Harjono, who dealt with the 2004 Asian tsunami, said it would be "a miracle really if it turns out to be less than 10,000" dead.
The 2004 tsunami killed 230,000 people - of which only 184,000 bodies were found.
Harjono noted that many bodies in Japan may have been sucked out to sea or remain trapped beneath rubble as they did in Indonesia's hardest-hit Aceh province. But he also stressed that Japan's infrastructure, high-level of preparedness and city planning to keep houses away from the shore could mitigate its human losses.
The impact of the earthquake and tsunami on the world's third-largest economy helped drag down the share markets Monday, the first business day since the disasters. The benchmark Nikkei 225 stock average for a second day Tuesday, by 6.5 percent to 8,999.73, wiping out this year's gains while the broader Topix index lost 7.5 percent.
To lessen the damage, Japan's central bank injected $61.2 billion Tuesday into the money markets after pumping in $184 billion on Monday.
Initial estimates put repair costs in the tens of billions of dollars, costs that would likely add to a massive public debt that, at 200 percent of gross domestic product, is the biggest among industrialized nations.
In a bid to stop the reactors at the nuclear plant from melting down, engineers have been injecting seawater as a coolant of last resort.
Yuta Tadano, a 20-year-old pump technician at the Fukushima power plant, said he was on the second floor of an office building in the complex when quake hit.
"It was terrible. The desks were thrown around and the tables too. The walls started to crumble around us and there was dust everywhere. The roof began to collapse.
"We got outside and confirmed everyone was safe . Then we got out of there. We had no time to be tested for radioactive exposure. I still haven't been tested," Tadano told The Associated Press at an evacuation center outside the exclusion zone.
"We live about 10 kilometers (6 miles) from the facility. We had to figure out on our own where to go," said Tadano, cradling his 4-month-old baby, Shoma. "I worry a lot about fallout. If we could see it we could escape, but we can't."
"Just because we are an evacuation center doesn't mean we are safe," said his sister-in-law Makiko Murasawa, 43.
The nuclear crisis has also raised global concerns about the safety of nuclear power at a time when it has seen a resurgence as an alternative to fossil fuels.
The head of the International Atomic Energy Agency said the Japanese government has asked the agency to send experts to help.
Yuasa reported from Tokyo
For emergency information, assistance, and locating family in connection with earthquake in Japan: http://www.facebook.com/l/6b2e3a9CLMNbUwBsOw1jOL8d5aw/www.jhelp.com
Phone numbers in US and Japan:
202 559 4683
800 373 1110
0570 000 911
011 81 90 7170 4769
011 81 90 3080 6711