There is a risk of a second explosion at the quake-hit Fukushima power station, Japanese officials have said.
However, chief cabinet secretary Yukio Edano said the facility could withstand the impact and the nuclear reactor itself would not be damaged.
Technicians are frantically battling to cool reactor 3 following a blast at the building housing reactor 1 on Saturday.
A state of emergency has also been declared at the Onagawa plant to the north of Fukushima.
The first - or lowest - state of emergency was reported by Tohoku Electric Power Company, said the UN nuclear watchdog the IAEA.
It was declared "as a consequence of radioactivity readings exceeding allowed levels in the area surrounding the plant. Japanese authorities are investigating the source of radiation," the IAEA said on its website.
"The authorities have informed the IAEA that the three reactor units at the Onagawa nuclear power plant are under control."
Risk of explosion
The Japanese government has doubled the size of the evacuation zone around Fukushima-Daiichi (Fukushima I plant) to 20km (12.4 miles), and some 80,000 people are being moved out of the zone.
With the loss of power at reactor 3, and with its valves and pumps damaged by the tsunami, emergency workers were pumping in seawater mixed with boron - which disrupts nuclear chain reactions - to cool the rods.
But this creates a build-up of radioactive steam containing hydrogen which must be vented to relieve pressure inside the reactor vessel - risking a blast.
"At the risk of raising further public concern, we cannot rule out the possibility of an explosion," Mr Edano said, according to AP news agency.
"If there is an explosion, however, there would be no significant impact on human health."
Experts say as long as authorities can keep fuel rods in the core covered with water, they should be able to avoid a major disaster.
But Mr Edano admitted that the tops of the rods had briefly been exposed.
Technicians opened valves, allowing small amounts of radioactive vapour to escape in a bid to reduce the pressure in the unit.
They performed a similar operation on the first reactor, hours before the explosion that wrecked the building it was housed in.
Twenty-two people were exposed to radiation following that blast, and scores more are feared to have been exposed.
The plant's operators, Tokyo Electric Power (Tepco), said radiation levels around the plant had temporarily risen above permissible limits.
Authorities deny their health has been put at risk, but the BBC's Chris Hogg says many people do not believe such reassurances.
Health authorities were conducting screenings at evacuation shelters across Fukushima prefecture.
Japan's nuclear agency graded the situation at the Fukushima plant as a Level 4 incident on the International Nuclear and Radiological Events Scale (Ines).
Level 4 incidents normally involve at least one death from radiation, although no-one at the plant has died.
The BBC's Chris Hogg in Tokyo says a meltdown at reactor 3 would be potentially more serious than at the other reactors, because it is fuelled by plutonium and uranium, unlike the other units which carry only uranium.