TOKYO - The owner of Japan's tsunami-damaged nuclear plant will pay an estimated $1 billion (88 billion yen) to thousands of residents who evacuated homes near the radiation-leaking plant and don't yet know when they can return.

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Compensation Tokyo Electric Power Co. ultimately may pay for the world's second-worst nuclear disaster is expected to be trillions of yen.

Japan's Cabinet last week approved a bill to help TEPCO meet the massive costs, and parliamentary approval is pending. It would establish a fund from public money and contributions from utilities and special government bonds.

The estimate TEPCO released Wednesday is in addition to 50 billion yen paid in preliminary compensation to 50,000 households in late May.

TEPCO said it is preparing to distribute the latest compensation to about 150,000 people forced to evacuate areas around the Fukushima Dai-ichi plant, which has leaked radiation since the March 11 earthquake and tsunami destroyed its power and crucial cooling systems.

The estimate is based on criteria adopted by a government panel this week _ up to 120,000 yen ($1,500) per month to each family for the first six months, a reduced 50,000 yen ($625) per month each for another six months.

TEPCO is also preparing to pay separate compensation to fishermen, farmers and agriculture cooperatives, and others who have suffered because of disaster. Those figures are not available yet.

On Wednesday, the Iitate village office moved into the prefectural, or state, government office in Fukushima City after more than 6,000 residents evacuated the village, which was designated as high-risk for long-term radiation exposure.

"I hope we can all return to our homes as soon as possible," village chief Norio Kanno told reporters.

At the Fukushima plant, workers are struggling to get a crucial water treatment system fully operational. Fresh water being pumped into the reactors to keep them cool becomes contaminated with radiation, and 110,000 tons of radiation-tainted water have pooled across the plant.

It could overflow within 10 days if action is not taken. The treatment system that went fully operational Friday was halted because a cartridge to absorb radioactive particles reached its limit within five hours, not several weeks as expected.

After cleaning and adjustment, the water treatment system is being tested again and has processed 1,700 tons of water, TEPCO spokesman Junichi Matsumoto said.

The contaminated water has hampered work to install a sustainable cooling system at each reactor that incorporates the water treatment system. Unit 1 is close to that stage, but the other two reactors have fallen behind due to high radiation or debris.

TEPCO has reduced water put into the reactors, so that less water accumulates, but there is a risk. Matsumoto acknowledged the temperature at Unit 3 has slightly risen and requires careful monitoring.

TEPCO hopes to bring the reactors to a stable cold shutdown state by early January, _ a goal some experts have questioned as too ambitious.