Residents close to the Fukushima plant have been living in evacuation centres for more than a month The Japanese government has ordered the operator of the nuclear plant damaged by last month's quake and tsunami to pay compensation to affected families. About 48,000 families who lived within 30km (18 miles) of the Fukushima Daiichi plant will be eligible.
The compensation is described as provisional, with payouts beginning on 28 April.
The plant operator, Tepco, is still trying to stabilise the nuclear facility.
"Tokyo Electric Company (Tepco) is to make an urgent and speedy payment in order to compensate for the losses incurred by evacuation and orders to stay indoors," said chief government spokesman Yukio Edano.
"The basic idea is that one household will receive 1 million yen ($12,000, £7,331). We think that such an amount is necessary as a provisional payment," he said.
The BBC's correspondent in Tokyo, Roland Buerk, says the payments are the first of what is likely to be a massive compensation bill.
JP Morgan has estimated Tepco may face claims of up to 2 trillion yen, nearly $24bn (£15bn) by the end of this year.
Protests Tepco and the Japanese government have faced criticism for not offering compensation earlier.
People forced to leave the area near the nuclear plant have been living in evacuation centres for more than a month.
With businesses shut, fields untended and fishing abandoned many have lost their livelihoods as well as their homes, our correspondent says.
There have been protests outside the headquarters of the plant's operator, with some protesters travelling long distances to make their feelings known.
Announcing the compensation, Tepco President Masataka Shimizu offered "heartfelt apologies" to residents hit by events at the plant. He said the company would cut costs to finance the payments.
"We want to streamline operations with no exceptions in what we consider," he said. "We are obviously thinking about pay cuts for our board and managers."
Fukushima Governor Yuhei Sato said more was needed.
"This is just a beginning. The accident has not ended. We will continue to ask the government and Tepco to fully compensate evacuees," he said.
Search continues Work to stabilise the nuclear plant is continuing. Engineers are pumping water into three reactors to cool fuel rods after cooling systems were knocked out by the quake and tsunami.
They have discharged waste water with low levels of radioactivity into the sea to make room to store more highly contaminated waste water on site.
Water needs to be removed from the basements of reactors 1, 2, and 3 before vital work on the cooling systems can begin.
On Thursday Tepco said that water levels in the basement of reactor 2 were continuing to rise, even as some was being pumped to storage.
Meanwhile, Japanese police are continuing their search for victims of the 11 March disasters within a 10km zone around the damaged Fukushima nuclear plant.
Up to 1,000 bodies are thought to be in the area, but their retrieval has been delayed because of radiation fears.
The earthquake and tsunami left 13,538 people dead and another 14,589 are missing. More than 150,000 have been made homeless.