A fresh explosion rocked reactor 2 at the Fukushima Daiichi plant - 250km (155 miles) north-east of Tokyo - in the early hours of Tuesday.
Chief Cabinet Secretary Yukio Edano said, "Now we are talking about levels that can impact human health."
He stressed that such levels were recorded at the plant and that the "further away you get from the power plant or reactor, the value should go down".
In his televised address, Prime Minister Kan said: "There is still a very high risk of more radiation coming out."
He added that the last remaining people within a 20km (12 mile) exclusion zone around the plant had to leave, and that those living between 20km and 30km from the site should remain indoors.