Tokyo Electric Power Co., the operator of the troubled Fukushima No. 1 nuclear power plant, on Thursday entered the final testing phase of a newly installed system to decontaminate dangerously high levels of radioactive water that have been building up at the complex.

The water treatment system underwent initial testing in the early hours of Thursday morning and the utility firm also known as TEPCO said the system is crucial in dealing with large volumes of radioactive water that have accumulated at the plant and ultimately containing the nuclear crisis.

The new system, which comprises four different devices, will function in part to absorb radioactive cesium from 105,000 tons of radioactive water -- the equivalent of 40 Olympic-sized swimming pools -- and turn it into a solid material so the water can be recycled and used to cool the plant's damaged reactors. The system will be fully-launched on Friday, according to TEPCO officials.

TEPCO said that following testing of French nuclear company Areva SA's installation, radioactive cesium in contaminated water dropped to about one-10,000th of original levels.

"In our step of the process, the radioactive material precipitates out like rain and settles in the bottom of the tanks, where it forms a radioactive sludge," said Areva spokesperson Jarret Adams. "And that sludge can be removed from the tanks and sent for long-term storage."

"We can reduce the radioactivity of the contaminated water by a factor of at least a thousand, so it will be significantly less radioactive than when it was coming in," Adams said.

Asia's largest utility firm also tested an installation made by American firm Kurion Inc., which reduced the level of cesium to around one-3000th of the original levels.

Failure to decontaminate the ever-increasing amounts of water will mean the No. 1 facility, located 220 kilometers northeast of Tokyo, will run out of space to contain the water and coolant liquid used to cool the plant's stricken reactors, damaged by the March 11 megaquake and tsunami. TEPCO said this could occur in less than a fortnight.

The prolonged nuclear catastrophe following the twin disasters, which sparked the world's worst nuclear disaster since the 1986 Chernobyl crisis, has led to the mandatory evacuation of thousands of people from the vicinity of the radiation-leaking plant and on Thursday the government designation yet more evacuation spots.

The government initially called for a 20-kilometer compulsory evacuation radius around the plant, but due to radiation levels in certain areas rising to levels above those permitted by international nuclear watchdogs and regulatory bodies, Chief Cabinet Secretary Yukio Edano said Thursday that assistance would be given to a fresh wave of residents having to evacuate from new radioactive "hot spots."

Edano, Japan's top government spokesperson, said the classification for a hot spot was an area in which levels of radiation could exceed 20-millisieverts per year and applied to specific households in residential areas not covered by the original evacuation mandate.