Tokyo Electric Power Co. (TEPCO), the operator of the Fukushima Nuclear Power Plant announced plans to scrap at least four damaged reactors at the crippled Fukushima plant.
Engineers at the plant have been trying to put the overheating reactors under control after the 9.0 magnitude earthquake and deadly tsunami hit the nuclear plant last March 11.
Japanese Chief Cabinet Secretary Yukio Edano said nuclear experts were still considering plans to cover the buildings with a special material to stop the radiation spreading.
For the first time, TEPCO Chairman Tsunehisa Katsumata spoke to reporters and said that reactors 1-4 would eventually have to be shut down for good.
In his talks with reporters, Katsumata said "his company was preparing to compensate those suffering damage caused by radiation leaks."
The TEPCO Chairman also apologized for the inconvenience caused by power shortage in the area.
Meanwhile, work on the cooling of the reactors continue as levels of radiation continue to rise and becoming a major hazard to people in and out of the plant.
Engineers are still trying to find out the cause of water contamination at building No.2.
In the meantime, Tony Roulstone, from Cambridge University's department of engineering says the contaminated water should be pumped out and "immobilized", perhaps in a concrete storage to prevent it from spreading.
"The indications are that either the torus or the pipes connecting it to the dry well containment around the reactor vessel have been breached," Mr Roulstone told BBC News.
"It seems the pressure from steam being relieved from the reactor was above its design pressure and that at some stage either that or a hydrogen explosion ruptured the torus or one of the connecting pipes."
"Now there seems to be water leaking out and causing these high levels of radioactivity."
Authorities are still working on plans for the safe and expeditious scrapping of the reactors. No timetable has been issued so far.