Thousands of people are being evacuated from the area around a nuclear reactor after its cooling system failed in Japan's devastating earthquake.

A state of emergency was declared around the Fukushima No 1 power plant as a precaution, because a cooling system was not working after the quake, officials said.

The prime minister, Naoto Kan, said there had been no reports of radiation leaks at any of the country's nuclear facilities.

Residents within a 2 mile (3km) radius of Tokyo Electric Power's (Tepco) Fukushima Daiichi nuclear plant had been told to evacuate, Japan's chief cabinet secretary, Yukio Edano, told a news conference. Kyodo news agency said around 3,000 residents were being moved out.

Work had begun on restoring the cooling function at the reactor, Jiji news agency quoted the trade ministry as saying.

Tepco confirmed that water levels inside the reactors were falling but it was working to maintain them to avert the exposure of nuclear fuel rods.

The company was trying to restore power to its emergency power system so it could add water to the reactors, a Tepco spokesman said.

"There is a falling trend (in water levels) but we have not confirmed an exposure of nuclear fuel rods," he said.

Tepco had been operating three out of six reactors at the Fukushima Daiichi nuclear plant at the time of the quake – the No 1, No 2 and No 3 units – all of which were shut down. Reactors core remain hot and still need cooling after they have been shut down.

The spokesman said there were no concerns of a water leak in the other three reactors at the plant, which were closed for planned maintenance.

"We launched the measure so we can be fully prepared for the worst scenario," Edano said. "We are using all our might to deal with the situation."

Eleven nuclear reactors were automatically shut down in the wider quake-affected areas of Japan, the government said.

Kan said: "Parts of nuclear plants were automatically shut down but we haven't confirmed any effects induced by radioactive materials outside the facilities."

A fire broke out in a turbine building and was extinguished at the Tohoku Electricity company's Onagawa nuclear plant in north-east Japan. Smoke was seen coming from the building, which is separate from the plant's reactor.

The four nuclear power plants closest to the epicentre had all been safely shut down, the International Atomic Energy Agency said, adding that it was seeking more information and had offered its help to Japan.