Until March 2011, Tokue Hosokawa had only to peer through the window of his home in Iitate village to confirm that all was well with his 100-year-old family business.

The 130 or so horses that once roamed this sprawling farm in Fukushima prefecture have sustained three generations of Hosokawa's family. Some were sold for their meat – a local delicacy – but his animals were better known for their appearances in commercials, period TV dramas and films, and local festivals celebrating the region's samurai heritage.

For decades, the 62-year-old horse breeder barely registered that his farm was just 25 miles north-west of the Fukushima Daiichi nuclear power plant. But the rural idyll was shattered on the afternoon of 11 March 2011, when the facility was hit by a towering tsunami that caused meltdowns in three of its reactors.

Even as people living in the path of the plant's radioactive plume were fleeing in their thousands, Iitate's 6,500 residents remained in their homes, convinced by official assurances that the village was safe.

But two and half years after the accident, Iitate has become a nuclear ghost town. When Hosokawa looks out of his window these days, it is at empty, irradiated fields.

Like several other farmers in Fukushima, Hosokawa ignored a government order to exterminate all of his horses and cows. "I told them that if the animals had been suffering from an infectious disease, then I'd have them destroyed," he said. "But not for something like this.

"Just after the accident one of the horses gave birth. When I saw that foal get to its feet and start feeding from its mother, I knew there was no way I could leave."

The order to evacuate Iitate did not come until weeks after the meltdown, as local authorities debated the risk posed to the village, which had only recently been voted one of Japan's most picturesque places. Rather than acting as a shield, the mountain forests surrounding Iitate had trapped radioactive particles, turning the village into a repository for dangerously high levels of contamination.

Hosokawa, short and wiry with the weathered complexion of a man who spends most of his waking hours outside, sent his wife and their daughter, Miwa, to safer parts of the prefecture.

But, unable to bear the thought of leaving his animals to starve, he stayed put and joined the handful of residents who continue to live in the contaminated homes they were ordered to abandon.

Although the evacuation order in parts of Iitate has been partially lifted to allow residents to visit during the day, radiation levels are still too high for a permanent return.

Last week, visiting officials from the International Atomic Energy Agency (IAEA) urged the government to prepare displaced residents from Iitate and other contaminated towns and villages for the grim news that cleaning up their former homes will take much longer than expected.

The IAEA report was published soon after Japanese officials admitted that the 5tn yen (£31.7bn) decontamination effort was woefully behind schedule. "We will have to extend the cleanup process, by one year, two years or three years. We haven't decided for sure yet," said Shigeyoshi Sato, an environment ministry official in charge of decontamination.

As Iitate's population plummeted in the spring of 2011, Hosokawa managed to find new homes for more than 80 of his horses. Then, in January this year, he noticed that several among the 30 that remained, mainly foals, had become unsteady on their feet.

Within weeks, 16 had died in mysterious circumstances. Autopsies on four of the horses found no evidence of disease and tests revealed caesium levels at 200 becquerels per kilo – twice as high as the government-set safety limit for agricultural produce, but not high enough to immediately threaten their health.

Hosokawa recently began legal action against the plant's operator, Tokyo Electric Power [Tepco], claiming 200m yen (£1,269,534) compensation for the loss of the horses he was forced to sell or give away. The animals that died last winter are not included.

Tepco agreed to pay him 10m yen for the loss of 39 horses he could prove were born on the farm, but refused to compensate him for the rest. The family refuses to back down. "No matter how long it takes," said Miwa, "we will keep on fighting."

The 30 or so animals left behind are sustained by feed paid for with donations, many of them sent anonymously, from horse lovers around Japan. One woman turned up on their doorstep with a million yen in cash. Hosokawa repays their generosity with gifts of Fukushima's famed peaches.

He estimates that he has lost about 100m yen in income since March 2011: the compensation the family received for the enforced evacuation has already been spent on uncontaminated feed from the US and Australia. "There was nothing left for the family," he said.

This summer, Miwa, 27, quit her job in Fukushima city to help her father rescue what little is left of their business. But with no end in sight to the evacuation order and a shortage of people willing to take on his remaining horses, Hosokawa reluctantly accepts that the farm's days may be numbered.

"We can't give these horses the same life as they had before the nuclear disaster, and no one wants to buy them," he said. "We can't make a living from them, but unless we feed them they will die."

As Fukushima's long and bitter winter draws in, the Hosokawas again fear the worst. "We don't know why the foals died, only that they died in winter," Miwa said. "I'm worried that we'll find more dead horses this winter."

Almost three years on, one of the few signs of human activity in Iitate is the crews of workers who have the near-impossible task of cleaning up the village's contaminated landscape. As quickly as they remove irradiated soil from around homes, schools and other public buildings, rain washes more radioactive particles down from the mountainous forests that cover much of Fukushima prefecture.

Few are convinced by official assurances that their village will again be fit to live in. "Our neighbours have all gone," Miwa said. "They're scattered all over the place. I don't even know where most of them are. The only people who say they'll come back are old. There's nothing here for people with young children." Fellow rebel farmers aside, Hosokawa's only companions are his daughter and the salespeople who frequently cold call with offers of "anti-radiation" pills.

"Life here has been very hard for everyone since the disaster," he said. "Most of the people I know want to return, but because of the radiation they know that they never will. This place is awash with tears. It's a village with no tomorrow."