Fuel rods inside one of the reactors at the Fukushima Daiichi nuclear power plant may have completely melted and bored most of the way through a concrete floor, the reactor's last line of defence before its steel outer casing, the plant's operator said.

Tokyo Electric Power (Tepco) said in a report that fuel inside reactor No 1 appeared to have dropped through its inner pressure vessel and into the outer containment vessel, indicating that the accident was more severe than first thought.

The revelation that the plant may have narrowly averted a disastrous "China syndrome" scenario comes days after reports that the company had dismissed a 2008 warning that the plant was inadequately prepared to resist a tsunami.

Tepco revised its view of the damage inside the No 1 reactor – one of three that suffered meltdown soon after the 11 March disaster – after running a new simulation of the accident.

It would not comment on the exact position of the molten fuel, or on how much of it is exposed to water being pumped in to cool the reactor. More than nine months into the crisis, workers are still unable to gauge the damage directly because of dangerously high levels of radiation inside the reactor building.

"Uncertainty involved in the analysis is significant, due to the uncertain nature of the original conditions and data used," Tepco said in a report. It said the concrete "could have been penetrated", but added that the fuel remained inside the reactor's outer casing.

Previously, the firm had said that only some of the fuel had burned through its inner pressure vessel and dropped into the containment vessel.

"Almost no fuel remains at its original position," Tepco said. The simulation shows that the fuel may have penetrated the concrete floor by up to 65cm, just 37cm from the reactor's outer steel wall.

Tepco said that about 60% of the fuel in the two other reactors that experienced meltdown had dropped onto the concrete base, but had caused less damage.

After the tsunami, workers at the site stopped injecting reactor No 1 with water for about 14 hours, resulting in more serious damage than sustained by the two other reactors.

The company added, however, that fuel in all three reactors was being kept stable by cooling water, adding that the erosion had stopped.

It said the findings would not affect plans to bring the reactors to a safe state, known as cold shutdown, possibly by the middle of the month.

Japanese authorities may announce cold shutdown on 16 December, the Yomiuri Shimbun reported on Friday. That stage is reached when water used to cool the fuel rods remains below boiling point, thereby preventing the fuel from heating up again.

Stabilising the reactors is just the first stage of the operation to resolve the crisis. Tepco has said it won't be able to begin removing the fuel for another 10 years. Decommissioning the plant could take at least 30 years.