Despite his age, 63-year-old Kazuo Niitsuma believes there are many more years of fishing ahead of him. The sea is in his family's blood, he says. His octogenarian father began working on boats when he was 12, and only retired three years ago.

But even if his health permits, Niitsuma knows he may never again get the chance to board his boat and head out into the Pacific in search of sole, whitebait, flounder and greenling.

The greatest threat to Niitsuma's livelihood, and that of other fishermen in Hisanohama, a small fishing town 125 miles north-east of Tokyo, lies just up the coast at the Fukushima Daiichi nuclear power plant.

The environment ministry recently announcement that 300 tonnes of contaminated groundwater from Fukushima Daiichi is still seeping over or around barriers into the Pacific every day, more than two years after it was struck by a tsunami in March 2011. Government officials said they suspected the leaks had started soon after the accident, which resulted in a nuclear meltdown.

The admission by the ministry, confirmed by Tokyo Electric Power (Tepco), which runs the plant, is likely to keep Hisanohama's 40 fishing boats in port for the foreseeable future. Tepco's failure to handle the contaminated water – and accusations that it tried to cover up the leaks – is a serious setback to attempts to clean up Fukushima Daiichi, 18 months after the government declared it had reached a "safe" state known as cold shutdown.

"I haven't been able to fish since the tsunami," Niitsuma said inside the concrete shell of the port's main building, whose foundations sank by up to a metre because of the force of the March 2011 quake. "People want to be reassured that they are buying fish that is safe to eat, and we can't give them that guarantee at the moment," he said.

Evidence that quantities of radioactive caesium-134 and -137 in locally caught fish have fallen to levels close to the government-set safe limit of 100 becquerels per kilogram is scant consolation, Niitsuma said. "At times like this, it feels like the nuclear problem will never be resolved, and for that Tepco and the government must take responsibility."

In a furious letter to Tepco's president, Naomi Hirose, Japan's national fisheries federation said the water leakages were an "act of treason to all fishing industry workers and to all members of the public in Japan".

The government imposed a ban on fishing in the Fukushima area after the tsunami, which killed more than 18,000 people along Japan's north-east coast and triggered the worst nuclear accident in the country's history.

Niitsuma's 15-metre boat, Sueyoshi Maru, has been idle ever since. Unable to make a living from a sea poisoned by radiation, the town's 70 fishermen earn money clearing tsunami debris; the only fish they catch are taken not to market, but to makeshift labs where they are tested for radiation from the plant, located just 12 miles to the north.

Tepco pumps out 400 tonnes of water a day of groundwater into the basements of damaged reactor buildings. There, it mixes with highly radioactive water that has already been used to cool the melted fuel, which is thought to lie deep inside the reactors.

The firm had consistently denied there were any leaks, saying it had contained excess water by hardening soil with sodium silicate to form a chemical "wall" around areas thought to be at the greatest risk.

But the US Nuclear Regulatory Commission and other experts have said the seepage will not affect areas beyond the sea directly off the coast of Fukushima Daiichi. "Even 300 tonnes [a day] — that's still going to be diluted to an almost undetectable level before it would get to any US territory," said the commission's information officer Scott Burnell.

Having conceded it had lost the ability to control the tainted water, Tepco promised to pump out tonnes of it and reinforce soil barriers. It also plans to build a 1.4km wall of soil, frozen solid by coolant, around four of the plant's six reactors by July 2015, in an attempt to prevent any further leakages.

Early estimates put the cost of the wall at 40bn yen (£266m), making it more likely that the government, which has already loaned Tepco billions of yen to compensate victims and decommission the plant, will use public money to help stem the flow of radioactive water.

Tepco's sudden about-turn over the leaks have added to public anger about its handling of the crisis. The disaster forced the evacuation of 160,000 people as radiation spewed from the plant, bringing Fukushima's farming and fishing industries to their knees.

"It's like there's an allergy to the name Fukushima," said Takashi Niitsuma, head of sales at the Iwaki fisheries co-operative, of which Hisanohama is a part.

"Even if we could catch fish for sale, no one would buy them. We're talking about the Pacific Ocean, so it's not just Fukushima that's affected by the contamination. If Tepco allows more water to leak into the sea, the criticism will be worldwide. For us as fishermen, it's not a question of whether we can revive the Fukushima brand – we have no choice. We have to at least try."

Tepco's promises to address the water problem did not even convince the prime minister, Shinzo Abe, whose support for nuclear power remains unshakeable.

"There is heightened concern among the public, particularly about the contaminated water problem," Abe said this week. "This is an urgent matter that needs to be addressed. Instead of leaving everything to Tepco, we need to create a firm national strategy."

Japan's newly launched Nuclear Regulation Authority (NRA) indicated that it, too, had lost faith in the utility's ability to manage the water crisis, the latest setback in a cleanup and decommissioning operation that is expected to take more than 40 years and cost $11bn.

The authority said Tepco "lacked a sense of crisis" about the threat to the marine environment. "Right now, we have an emergency," said Shinji Kinjo, an NRA official in charge of addressing the water leaks, adding that the flow of water "could accelerate very quickly".

Campaigners accused regulators of concentrating on the possible restart of Japan's idled nuclear reactors rather than ensuring Fukushima Daiichi's safety.

"More than two years after the Fukushima disaster, the Japanese government isn't any closer to taking control of the situation," said Hisayo Takada of Greenpeace Japan. "The government must hold the nuclear industry responsible for the catastrophe and seek expert assistance from other countries.

"The leakage of radiation from the Fukushima plant to the ocean is a disaster for marine life and Japanese fisheries, but Tepco has consistently hidden and understated the seriousness of the leaks.Tepco is clearly incapable of dealing with the ongoing disaster and cannot be trusted to handle the situation appropriately."

In the minutes before the tsunami crashed into Hisanohama, Kazuo Niitsuma, like many other fishermen, saved his boat by steering it out to sea and into the path of the waves. More than two years on, he can't escape the feeling that his act of bravery was in vain. His catch once fetched premium prices; now he lives off a government wage for collecting debris and modest compensation for loss of income.

"The nuclear disaster has left us with no motivation," he says. "Nothing has changed, so there's nothing to look forward to. But I've been a fisherman for 48 years and I'm not going to give up now."

• This article was edited on 12 August, 2013. A misleading comparison was removed.