Shinji Kinjo, head of a Nuclear Regulatory Authority (NRA) said on Monday that radioactive groundwater at the damaged facility had risen above a barrier installed to contain it. This means the toxic water is likely flowing into the sea.
"Right now, we have an emergency," he added.
The regulatory watchdog has accused the Tokyo Electric Power Company (TEPCO), the operator of the Fukushima Daiichi nuclear plant, of neglecting the issue.
However, TEPCO says it has taken various measures to stop the leakage.
The Fukushima plant was destroyed in a mega earthquake followed by a tsunami on March 11, 2011. At that time, the Japanese government allowed TEPCO to dump thousands of tons of radioactive water into the sea in an emergency move.
The developments come as a Japanese parliamentary panel has found that the incident at the Fukushima nuclear plant had been a “man-made disaster” and not only a result of the tsunami. The report criticized “governments, regulatory authorities and Tokyo Electric Power” for being devoid of “a sense of responsibility to protect people’s lives and society.”