* Govt spokesman: radioactive water buildup at Fukushima a 'very serious issue'
* PM Abe to tell industry ministry to step up role at Fukushima plant
* Spokesman: industry ministry considering public funds to deal with toxic water
TOKYO, Aug 7 (Reuters) - The Japanese government will take a significantly bigger role in the massive clean-up at the crippled Fukushima nuclear plant and may spend taxpayer money to contain the build-up of radioactive water, officials said on Wednesday.
The move comes as operator Tokyo Electric Power Co struggles to contain toxic water flowing into the ocean from the plant.
Chief Cabinet Secretary Yoshihide Suga said the buildup of the radioactive water was a very serious issue and that Prime Minister Shinzo Abe would order the Ministry of Economy, Trade and Industry, which regulates power utilities, to step in.
The ministry is considering requesting public funds for the cleanup, Suga told reporters. The Nikkei newspaper said the funds would be used to freeze the soil to prevent groundwater from leaking into the reactor buildings - a project with an estimated cost of up to 40 billion yen ($410 million).
"The government must take a step forward and get involved in achieving this (coping with the contaminated water)," Suga told a regular news conference.
"I understand that METI is considering the budget. The prime minister will instruct the METI minister to quickly take measures," Suga said.
The government moves appear to be in response to warnings by industry experts that Tepco's failure to address the problem questioned its ability to safely decommission the Fukushima Daiichi plant, 220 km (130 miles) northeast of Tokyo.
The utility has been widely castigated for its failure to prepare for the massive 2011 tsunami and earthquake that devastated the plant and led to the worst nuclear disaster in the world since Chernobyl. It has also been criticised for its inept response to the disaster and covering up shortcomings.
Tepco's handling of the clean-up has also complicated Japan's efforts to restart its 50 nuclear power plants, almost all of which have been shut since the disaster because of safety concerns.
That has made Japan dependent on expensive imported fuels for virtually all its energy.
An official from the country's nuclear watchdog told Reuters on Monday that the highly radioactive water seeping into the ocean from the Fukushima plant was creating an "emergency" that Tepco was not successfully containing on its own.
The utility pumps out some 400 tonnes a day of groundwater flowing from the hills above the nuclear plant into the basements of the destroyed buildings, which mixes with highly irradiated water that is used to cool the reactors.
Tepco is trying to prevent groundwater from reaching the plant by building a "bypass", but recent spikes of radioactive elements in sea water has prompted the utility to reverse months of denials and finally admit that tainted water is reaching the sea.
One more measure both Tepco and METI are have been working on since May is freezing the soil to prevent groundwater from leaking into the reactor buildings. Similar technology is used in preventing groundwater flooding in subway construction.
The technology was originally proposed by one of Japan's largest construction companies, Kajima Corp that is already heavily involved in the clean-up.
Experts say, however, that maintaining the ground temperatures for months, if not years, would be costly.
"Right now there are no details (of the project yet). There's no blueprint, no nothing yet, so there's no way we can scrutinise it," said Shinji Kinjo, head of a Nuclear Regulatory Authority (NRA) task force set up to deal with the Fukushima water issue.
METI has requested a budget allocation to help address the water problem, an official told Reuters on condition of anonymity.
"It is incredibly difficult to completely block the groundwater like this. It would be better if they could pump clean water before it reaches the plant," said Kotaro Ohga, research fellow at Hokkaido University and groundwater expert.