Japan has begun evacuating people from outside the official20-kilometre exclusion zone surrounding the crippled Fukushima nuclearplant in the country's northeast.

Radiation is continuing to leak from the ageing Fukushima plant, which was badly damaged in the March 11 earthquake and tsunami.

Morethan 5,000 people from the towns of Iidate-mura and Kawamata-cho weremoved on Sunday to public housing, hotels and other facilities innearby cities.

The two towns are 30 kilometres from the plant,but are receiving high amounts of radioactive contamination due to windpatterns.

The government says they're the first of a series of new phased relocations that will take place in the coming days.

Althoughthe government has told residents in new areas being evacuated thatthey must leave, observers say officials are unlikely to punish anyonewho chooses to stay.

"I am sure all of you have lived inIidate-mura all your life and never moved," the town's mayor NorioKanno told one group of residents as they prepared to leave their homes.

"Consideringthe future of our children and young people, as well as the health ofour village residents, we have no choice but to go ahead.

"I will do whatever I can so that you will be able to return home as soon as possible."

Correspondentssay the first group of evacuees were mostly parents of small childrenand pregnant women, who are considered more vulnerable.

Signs of meltdown

Atthe plant itself, emergency crews are reassessing the status of reactorone at the six-reactor facility, after discovering that fuel inside thereactor had apparently melted down.

The plant's operator, TEPCO,says about 3,000 tons of highly radioactive contaminated waste waterwas found underneath the reactor, forcing officials to begin looking atpumping it out for processing.

In a related development, theChubu Electric Power Company says all reactors at its ageing Hamaokanuclear power plant entered into a state of "cold shutdown" on Sunday.

Hamaokawas shut down amid warnings from seismologists that a major earthquakeis overdue in the Tokai region southwest of Tokyo where the plant islocated.

Prime Minister Naoto Kan hs said the plant will stayshut until a higher sea wall is built and other measures are taken toprotect it against earthquakes and tsunamis.