Japan is taking the leakage of radioactive water at the Fukushima nuclear power plant seriously, its watchdog said Wednesday, proposing raising the rating to describe it as a "serious incident" rather than "an anomaly."

The operator of the plant said about 80,000 gallons, or 300,000 liters, of contaminated water has leaked from one of hundreds of steel tanks around the wrecked Fukushima Dai-ichi plant. Tokyo Electric Power Co. hasn't figured out how or where the water leaked, but suspects it did so through a seam on the tank or a valve connected to a gutter around the tank.

The watchdog, the Nuclear Regulation Authority, proposed at a weekly meeting Wednesday to raise the rating of the leak to Level 3 from an earlier Level 1 on an International Nuclear and Radiological event scale of 0 to 8. The watchdog, however, plans to consult with the U.N. nuclear regulatory agency over whether it is appropriate to use the INES evaluation scale on the badly wrecked Fukushima plant.

TEPCO said that because the tank is about 330 feet from the coastline, the leak does not pose an immediate threat to the sea. But Hideka Morimoto, a watchdog spokesman, said water could reach the sea via a drain gutter.

Four other tanks of the same design have had similar leaks since last year. The incidents have shaken confidence in the reliability of hundreds of tanks that are crucial for storing what has been a continuous flow of contaminated water.

"We are extremely concerned," Morimoto told reporters Wednesday. He urged TEPCO to quickly determine the cause of the leak and its possible effect on water management plans.

TEPCO spokesman Masayuki Ono said the leaked water seeped into the ground after largely escaping piles of sandbags added to a concrete barrier around the tank.

Workers were pumping out the puddle and the remaining water in the tank and will transfer it to other containers, in a desperate effort to prevent it from escaping into the sea ahead of heavy rain predicted later in the day around Fukushima. By Tuesday afternoon they had captured only about 1,000 gallons, or 4,000 liters, Ono said.

The water's radiation level, measured about 2 feet above the puddle, was about 100 millisieverts per hour -- the maximum cumulative exposure allowed for plant workers over five years, Ono said.

The plant suffered multiple meltdowns following a massive earthquake and tsunami in March 2011 -- a Level 7 "major accident" on the INES rating and the worst since Chernobyl in 1986. Hundreds of tanks were built around the plant to store massive amounts of contaminated water coming from the three melted reactors, as well as underground water running into reactor and turbine basements.

However, contaminated water that TEPCO has been unable to contain continues to enter the Pacific Ocean at a rate of hundreds of tons per day. Much of that is groundwater that has mixed with untreated radioactive water at the plant.

The water that leaked from the tank had been partially treated, with cesium and salt removed, before being stored.

Ono said the latest leak was by far the worst from a steel storage tank in terms of volume. The previous four cases involved leakages of only up to 2.5 gallons.

TEPCO says the tanks that have leaked use rubber seams that were intended to last about five years. Ono said TEPCO plans to build additional tanks with welded seams that are more watertight, but will still have to rely on ones with rubber seams.

About 350 of some 1,000 steel tanks built across the plant complex containing nearly 80 million gallons, or 300 million liters, of partially treated contaminated water are less-durable ones with rubber seams.

"We have no choice but keep building tanks, or there is no place to store the contaminated water," Ono said.

The massive amount of radioactive water is among the most pressing issues affecting the cleanup process, which is expected to take decades.

The contaminated water is recycled as reactor cooling water, but its volume grows by 105,000 gallons, or 400,000 liters, a day because of underground water inflow. TEPCO plans to secure storage facilities capable of holding 200 million more gallons of water, or 800 million liters, by 2015.

To reduce leaks unrelated to the tanks, plant workers are using measures such as building chemical underground walls along the coastline, but they have made little improvement so far.

The public is growing frustrated with the company's failure to contain and clean up the mess.

“TEPCO’s actions are reactive and slow,” Kiyoshi Takasaka, a member of a committee of nuclear experts advising Fukushima prefecture, told the Japanese media. Other members of the committee complain that TEPCO hasn't got a convincing containment plan.

Minoru Takata, director of the Radiation Biology Center at Kyoto University, told The Wall Street Journal that the radioactive water doesn’t pose an immediate health threat unless a person goes near the damaged reactors. But over the longer term, he’s worried that the leakage could cause higher rates of cancer in Japan. Scientists in Japan and the United States says the leaks into the Pacific Ocean pose little threat to Americans.

Despite the ongoing problem and public anger, Prime Minister Shinzo Abe supports restarting nuclear plants idled following the Fukushima disaster. Abe, who has been a strong defender of Japan's nuclear program, has been trying to kick-start Japan's stagnant economy and the nuclear plants are a key to reducing expensive energy imports.

If the government can solve the leakage problem at the crippled nuclear plant, it may give the politicians enough support to allow them to switch on the country's nuclear reactors again. But by taking over the problem at Fukushima, it has now become his government's problem and its future could hang on whether the ice wall works.

The Japanese government recently allowed international media to travel inside the uninhabited zone around the plant, on the nation's northeastern coast. Villages appear frozen in time, deserted, with everything left as it was when residents were evacuated. The crippled nuclear plant, whose reactors have still not cooled, is situated on a hill overlooking what were once beautiful beaches now littered with vehicles and debris from the tsunami.

Former residents are allowed to occasionally visit their old homes, but can't stay long and face a vigorous radiation checking procedure every time they leave. The sea, once famous across Japan for the fish it provided, is bereft of fishing boats.

Recent tests of water from wells in the area show that radioactivity is still hundreds of times above safe drinking levels.

Fox News' David Piper and The Associated Press contributed to this report.