* Fukushima power plant manager says water problem must be brought under control
* Workers build new tanks to handle water, upgrade filtration system
* Underground ice wall planned to control groundwater
By Yuka Obayashi
OKUMA, Japan, April 18 (Reuters) - The manager of the Fukushima nuclear power plant admits to embarrassment that repeated efforts have failed to bring under control the problem of radioactive water, eight months after Japan's prime minister told the world the matter was resolved.
Tokyo Electric Power Co, the plant's operator, has been fighting a daily battle against contaminated water since Fukushima was wrecked by a March 2011 earthquake and tsunami.
Prime Minister Shinzo Abe's government pledged half a billion dollars last year to tackle the issue, but progress has been limited.
"It's embarrassing to admit, but there are certain parts of the site where we don't have full control," Akira Ono told reporters touring the plant this week.
He was referring to the latest blunder at the plant: channeling contaminated water to the wrong building.
Ono also acknowledged that many difficulties may have been rooted in Tepco's focus on speed since the 2011 disaster.
"It may sound odd, but this is the bill we have to pay for what we have done in the past three years," he said.
"But we were pressed to build tanks in a rush and may have not paid enough attention to quality. We need to improve quality from here."
The Fukushima Daiichi station, 220 km (130 miles) northeast of Tokyo, suffered triple nuclear meltdowns in the worst nuclear disaster since Chernobyl in 1986.
The issue of contaminated water is at the core of the clean-up. Japan's nuclear regulator and the International Atomic Energy Agency say a new controlled release into the sea of contaminated water may be needed to ease stretched capacity.
But this is predicated on the state-of-art ALPS (Advanced Liquid Processing System) project, which removes the most dangerous nucleides, becoming fully operational. The system has functioned only during periodic tests.
As Ono spoke, workers in white protective suits and masks were building new giant tanks to contain the contaminated water - on land that was once covered in trees and grass.
A cluster of cherry trees, unmoved since the disaster, is in bloom amid the bustle of trucks and tractors at work as 1,000 tanks in place approach capacity. Pipes in black insulation lie on a hill pending installation for funneling water to the sea.
"We need to improve the quality of the tanks and other facilities so that they can survive for the next 30-40 years of our decommission period," Ono said, a stark acknowledgement that the problem is long-term.
Last September, Abe told Olympic dignitaries in Buenos Aires in an address that helped Tokyo win the 2020 Games: "Let me assure you the situation is under control."
Tepco had pledged to have treated all contaminated water by March 2015, but said this week that was a "tough goal."
The utility flushes huge amounts of water over the reactors to keep them cool. That water mixes with groundwater that seeps into basements, requiring more pumping, treatment and storage.
In a rare success, the government won approval from fishermen for plans to divert into the sea a quarter of the 400 tonnes of groundwater pouring into the plant each day.
But things keep going wrong.
Last week, Tepco said it had directed 203 tonnes of highly radioactive water to the wrong building, flooding its basement. Tepco is also investigating a leak into the ground a few days earlier from a plastic container used to store rainwater.
In February, a tank sprouted a 100-tonne leak of radioactive water, the most serious incident since leaks sparked international alarm last year.
A hangar-like structure houses Toshiba Corp's ALPS system, able to remove all nucleides except for less noxious tritium, found at most nuclear power stations, its planners say.
It sat idle for 19 months after a series of glitches. The latest miscue occurred on Wednesday, when a tonne of radioactive water overflowed from a tank.
"The ultimate purpose is to prevent contaminated water from going out to the ocean, and in this regard, I believe it is under control," Ono said. But the incidents, he said, obliged officials to "find better ways to handle the water problem".
The government says it will help fund the filtration system, build an underground ice wall and erect more storage tanks.
The 1,000 tanks hold 440,000 tonnes of contaminated water. Some 4,500 to 5,000 workers, about 1,500 more than a half year ago, are trying to double the capacity by 2016.
Once the deal was clinched with the fishermen, Tepco embarked on a plan to use a water bypass, from as early as next month, to funnel clean groundwater to the sea.
But the latest samples next to the bypass found elevated levels of radiation and the project was placed under further scrutiny. Tepco said the radiation was within permitted limits.
Plans also call for a 1.4-km underground wall of ice to block groundwater. Tests began last month and Tepco hopes next year to begin construction - sinking giant refrigeration rods into the ground to create an impermeable wall of frozen earth. (Additional reporting by Mari Saito in TOKYO; Editing by Ron Popeski)