Tokyo warned Wednesday that radioactive iodine over twice the safe level for infants had been detected in its tap water after Japan's massive earthquake crippled a nuclear plant.

The revelation came after the United States barred imports of dairy and other produce from areas near the Fukushima power station, and as the Chinese territory of Hong Kong became the first Asian economy to follow suit.

Japan also estimated the immense economic impact of the March 11 earthquake and tsunami, saying it could hit 25 trillion yen ($309 billion) -- double that of the 1995 Kobe quake and nearly four times more than Hurricane Katrina.

The confirmed death toll from the earthquake and tsunami that battered Japan's northeast coast rose to 9,487, and Japan holds out little hope for 15,617 officially listed as missing.

Japan has already banned farm produce from areas near the crippled plant northeast of Tokyo, which has been leaking radiation and has suffered a series of explosions and fires since the country's worst natural disaster in nearly a century.

France urged the European Union to also monitor Japanese food imports because of the emergency at the Pacific coast plant, where engineers are battling to prevent a meltdown in overheating reactors.

In one Tokyo ward, a water sample contained 210 becquerels of iodine per kilogramme, or more than double Japan's legal limit, a city official said. Tokyo's stock market dived 1.6 percent on the news.

The government advised residents throughout the city to avoid using tap water to make infant milk formula until further notice, and said it would distribute 240,000 water bottles to households in need.

Bottled water quickly disappeared from shelves in Tokyo as people rushed to stock up despite government appeals against panic-buying, Kyodo News reported.

Tainted tap water was also detected in the city of Hitachi-ota in Ibaraki prefecture, located between Tokyo and the Fukushima plant, public broadcaster NHK reported.

The government has declared an exclusion zone with a radius of 20 kilometres (12 miles) around the power station and evacuated tens of thousands of people, while telling those within 20-30 kilometres to stay indoors.

But top government spokesman Yukio Edano unveiled for the first time estimates that people outside the 30-kilometre zone could be exposed to radiation of 100 millisieverts or more -- an annual dose associated with increased risk of cancer -- Kyodo said.

"As a precautionary measure, I would like to recommend that if people (outside the 30-km radius) are on the leeward side of the nuclear plant, they close their windows and stay indoors inside sealed buildings as far as possible," he was quoted saying.

Prime Minister Naoto Kan stopped shipments of untreated milk and vegetables including broccoli, cabbage and parsley from areas near the plant, about 250 kilometres northeast of Tokyo.

Farm produce shipments were halted from Fukushima and three nearby prefectures -- Ibaraki, Tochigi and Gunma -- while radiation monitoring of farm and seafood products was stepped up in six others, officials said.

The new inspection zone extends to Saitama and Chiba, part of the greater Tokyo urban sprawl that is home to more than 30 million people.

The health ministry said radioactivity drastically exceeding legal limits was found in 11 kinds of vegetable grown in Fukushima.

Radioactive caesium at 82,000 becquerels -- 164 times the legal limit -- was detected in one type of leaf vegetable, it said.

The ministry said that if people eat 100 grams (four ounces) a day of the vegetable for about 10 days, they would ingest half the amount of radiation typically received from the natural environment in a year.

"Even if these foods are temporarily eaten, there is no health hazard," said Edano, following reports that some products may have already entered the market.

"But unfortunately, as the situation is expected to last for the long term, we are asking that shipments stop at an early stage, and it is desirable to avoid intake of the foods as much as possible."

Even if the short-term risk is limited for now, scientists pointing to the 1986 Chernobyl disaster warn that some radioactive particles concentrate as they travel up the food chain and stay in the environment for decades.

The US Food and Drug Administration said it has placed an import alert on all milk, dairy products, fresh vegetables and fruit from four Japanese prefectures.

"In addition, FDA will continue to flag all entries from Japan in order to determine whether they originated from the affected area," it said. "FDA will test all food and feed shipments from the affected area."

Hong Kong said it was slapping a ban on a variety of food imports from five prefectures after contamination as much as 10 times above safe levels was found in vegetables shipped from Japan.

South Korea said it was considering a similar ban.

Around Asia, many Japanese restaurants and shops have reported a decline in business, and governments have stepped up radiation checks on the country's goods. Tainted fava beans from Japan have already cropped up in Taiwan.

In Japan, any further food shortages threaten to compound the misery for hundreds of thousands made homeless by the 9.0-magnitude quake and the jet-speed tsunami it spawned that erased entire communities.

As grieving survivors huddled in evacuation shelters amid the rubble of their former lives, their fate was overshadowed by the struggle to avert another massive catastrophe -- a full nuclear meltdown at Fukushima.

Engineers hope to restart the cooling systems of all six reactors that were knocked out by the 14-metre (46-foot) tsunami, and they have already reconnected the wider facility to the national power grid.

But workers were evacuated from part of the site after dark smoke rose from one of the reactors, said plant operator Tokyo Electric Power Co.

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