India banned all food imports from Japan on Tuesday, the first country to impose a blanket block over radiation from a stricken nuclear plant, as shares in its operator plunged to an all-time low.
With workers pumping toxic water from the Fukushima atomic plant into the Pacific Ocean for a second day Japan imposed a legal limit for radioactive iodine in fish, adding it would look at widening tests to cover a larger area.
Raised levels of radioactive iodine had been discovered in a fish caught off Ibaraki prefecture, south of the crippled plant.
An Indian government statement said all food imports from Japan "stand suspended with immediate effect" for three months, or until "credible information is available that the radiation hazard has subsided to acceptable limits".
The move by India, which imports small amounts of fruits, vegetables and processed food, is the first nationwide ban, while several countries including China, Singapore and the United States have blocked food from some Japanese prefectures.
Shares in Tokyo Electric Power Co (TEPCO) plunged to a new low of Y362 ($A4.15) yen - their lowest ever level - amid concerns the firm, which operates the power station, will face huge compensation bills.
The embattled company has lost more than 80 per cent of its value since the March 11 quake and tsunami knocked out reactor cooling systems at the Fukushima nuclear plant, triggering explosions and releasing radiation.
On Monday, its operators began releasing low-level radioactive water into the sea to free up urgently needed safe storage space for water so toxic that it is halting crucial repair work.
The company has said it needs to dump 11,500 tonnes, or more than four Olympic pools' worth, of the radioactive liquid, raising concerns about marine life in the island nation, where seafood is a key source of protein.
Some radioactive runoff has already leaked into the Pacific Ocean, raising levels of iodine-131 to over 4,000 times the legal limit in one measurement.
On Tuesday, government chief spokesman Yukio Edano announced a legal limit of 2000 becquerels per kilogram for radioactive iodine in seafood, the first time such restriction for fish.
"The government has decided to temporarily adopt the same limit as for vegetables," he told a press conference.
The move came after radioactive iodine of more than double that concentration was detected in a variety of small fish known as konago, or sand lance, caught off Ibaraki, south of the plant.
Fishing of the species was stopped locally, reports said.
Radioactive iodine above legal limits has been detected in vegetables, dairy products and mushrooms, triggering shipping bans, but officials had said seafood was less at risk as ocean currents and tides dilute dangerous isotopes.
Fishermen in the area expressed outrage over the decision to dump radioactive water into the ocean.
"We heard radioactive material was leaking into the sea," said Yoshihiro Niizuma of the Fukushima Fisheries cooperative. "Now they are dumping contaminated water on purpose."
Seoul also questioned the decision, saying the proximity of the two neighbours made Japan's action "a pressing issue" for South Korea.
Fishing has been banned within 20 kilometres of the stricken plant, matching the radius of the evacuation zone on land, where tens of thousands of residents have been moved out.
The dumping of radioactive water into the sea has also cast concerns on the earnings of the fishery industry, and some analysts estimate TEPCO could face compensation claims of more than Y10 trillion ($A114.63 billion).
TEPCO last week said it had secured two trillion yen in funding but warned that this would not be enough.
The company said on Tuesday it had offered 10 municipalities in Fukushima prefecture whose residents have had to evacuate "consolation" payments of Y20 million ($A229,253), separate to future compensation.
One of them, Namie, rejected the offer, with a municipality spokeswoman saying: "The town has a population of over 20,000, so the amount to be received by each resident would be less than 1,000 yen."
The money had been refused "so that we can leave room for speaking strongly against the company," she added.
The wider economic fallout from Japan's triple calamity - the massive March 11 earthquake, giant tsunami and the nuclear crisis - is likely to drive the country into recession in coming months, said a survey of economists.
The disaster, which has left more than 12,000 dead and over 15,000 missing, has also hit exports, business confidence and consumer spending, the Nikkei daily said in the survey of 11 major private economic institutions.