On the future of the beleaguered utility firm, and amid rumors of nationalization, Kan said that he wanted Tokyo Electric Power Co. (TEPCO) to redouble its efforts as a private entity, but added that ultimately the government would take responsibility for the massive compensation claims.

"If it exceeds TEPCO's capabilities, the government must deal with the issue responsibly," he said.

But while Kan said that an extra budget would be compiled to deal with the monumental affects of the disaster and some state-projects for this fiscal year have already been suspended. He failed to explain exactly where the cash-strapped government would get the emergency allocation.

According to Economy Minister Kaoru Yosano, the total cost of the disaster would range between 191 to 298 billion U.S. dollars.

As the government struggles with a budget deficit equal to nearly 50 percent of the government's pre-quake budget, economists fear the government may struggle to issue further debt to effectively deal with the crisis.

Meanwhile, thousands of Japanese Self-Defense Forces (SDF) personnel and U.S. military troops on Friday launched a massive mission to find and retrieve bodies that had not yet been recovered.

The search came as the government revealed that radiation from a nuclear power plant crippled by the twin disaster had been found in groundwater, with contamination already reported in the air, ocean and food.

Some 8,000 SDF personnel and about 7,000 U.S. military troops will take part in the intensive search and recovery operation, the defense ministry said.

Japanese and U.S. troops deployed 120 aircraft and 65 vessels to be used in the three-day mission to search coastal areas where homes, businesses, schools, ships and cars were swept away by massive torrents of water following the earthquake.

The National Police Agency said on Friday that the catastrophic earthquake and ensuing tsunami have so far left 11,620 people dead and 16,464 others missing.

Many victims of the quake and ensuing tsunami are believed to have been swept out to sea by the surging tsunami and the huge recovery operation has been launched to coincide with favorable tidal patterns that will make it easier to detect bodies, the ministry said.

Local police in Fukushima Prefecture believed that more than 1, 000 bodies still remain uncollected within the evacuation zone around the volatile nuclear plant and are being exposed to increasing levels of radiation day-by-day as they decompose.