Japanese officials have conceded that the battle to salvage four crippled reactors at the Fukushima Daiichi nuclear power plant has been lost.

The plant's operator, Tokyo Electric Power (Tepco), said the reactors would be scrapped, and warned the operation to contain the nuclear crisis, well into its third week, could last months.

Tepco's announcement came as readings showed a dramatic increase in radioactive contamination in the sea near the atomic complex.

The firm's chairman, Tsunehisa Katsumata, said it had "no choice" but to scrap the Nos 1-4 reactors, but held out hope that the remaining two could continue to operate. It is the first time the company has admitted that at least part of the plant will have to be decommissioned.

But the government's chief spokesman, Yukio Edano, repeated an earlier call for all six reactors at the 40-year-old plant to be decommissioned. "It is very clear looking at the social circumstances," he said.

Tens of thousands of people living near the plants have been evacuated or ordered to stay indoors, while radioactive materials have leaked in to the sea, soil and air.

On Thursday, the International Atomic Energy Agency (IAEA) suggested widening the 30-km exclusion zone around the plant after finding that radiation levels at a village 40km from the plant exceeded the criteria for evacuation.

"We have advised [Japanese officials] to carefully assess the situation, and they have indicated that it is already under assessment," Denis Flory, a deputy director of the IAEA, said.

The French president, Nicolas Sarkozy, was due to arrive in Tokyo on Thursday to show support for the Fukushima operation and for talks with his Japanese counterpart, Naoto Kan. Sarkozy, the current G8 chair, is the first foreign leader to visit Japan since the 11 March earthquake and tsunami.

An emotional Katsumata apologised for the anxiety the crisis has caused.

"We apologise for causing the public anxiety, worry and trouble due to the explosions at reactor buildings and the release of radioactive materials," he told reports in Tokyo late on Wednesday. "Our greatest responsibility is to do everything to bring the current situation to an end and under control."

He said the "dire situation" at the plant was likely to continue for some time.

The pressure to make progress also took its toll on Tepco's chief executive, Masataka Shimizu, who is in hospital being treated for exhaustion.

The country's nuclear and industrial safety agency, Nisa, said on Thursday radioactive iodine at 4,385 times the legal limit had been identified in the sea near the plant, although officials have yet to determine how it got there. On Wednesday the measurement had been 3,355 times the legal limit.

Hidehiko Nishiyama, a Nisa spokesman, said fishing had stopped in the area, adding that the contamination posed no immediate threat to humans. "We will find out how it happened and do our utmost to prevent it from rising," he said.

The government's acceptance of help from the US and France has strengthened the belief that the battle to save the stricken reactors is lost.

On Tuesday, a US engineer who helped install reactors at the plant said he believed the radioactive core in unit No 2 may have melted through the bottom of its containment vessel and on to a concrete floor.

While Nisa officials attempted to play down the contamination's impact on marine life, any development that heightens health concerns among consumers will dismay local fishermen, many of whom already face a long struggle to rebuild their businesses after the tsunami.

Experts say the radiation will be diluted by the sea, lessening the contamination of fish and other marine life.

Robert Peter Gale, a US medical researcher who was brought in by Soviet authorities after the Chernobyl disaster, said recent higher readings of radioactive iodine-131 and caesium-137 should be of greater concern than reports earlier this week of tiny quantities of plutonium found in soil samples.

But he added: "It's obviously alarming when you talk about radiation, but if you have radiation in non-gas form I would say dump it in the ocean."

Gale, who has been advising the Japanese government, said: "To some extent that's why some nuclear power plants are built along the coast, to be in an area where the wind is blowing out to sea, and because the safest way to deposit radiation is in the ocean.

"The dilutional factor could not be better - there's no better place. If you deposit it on earth or in places where people live there is no dilutional effect. From a safety point of view the ocean is the safest place."

Criticism of Tepco is building after safety lapses last week put three workers in hospital - all have been discharged - and erroneous reports of radiation data.

Shimizu, 66, has not been seen since appearing at a press conference on 13 March, two days after the disaster.

He had reportedly resumed control of the operation at the firm's headquarters in Tokyo after suffering a minor illness, but on Tuesday he was admitted to hospital suffering from high blood pressure and dizziness. Tepco said on Wednesday he was not expected to be absent for long.

The hundreds of workers at the plant must now find a balance between pumping enough water to cool the reactors and avoiding a runoff of highly radioactive excess water. As yet they do not have anywhere to store the contaminated water.

The options under consideration were to transfer the water to a ship or cover the reactors to trap radioactive particles, Edano said.