By Laura Zuckerman

(Reuters) - Testing of surface air near an underground nuclear waste site in New Mexico's desert showed elevated levels of radiation but did not pose a threat to humans or the environment, a U.S. Department of Energy official said on Thursday.

Trace amounts of man-made radioactive elements such as plutonium were found at an air-monitoring site half a mile from the Waste Isolation Pilot Plant and are tied to a radiation leak in the underground salt formation where waste from defense research and nuclear weapons production is stored, said Joe Franco, manager of an Energy Department field office that oversees the plant.

Energy officials said over the weekend that there was no apparent surface air contamination from the accidental release of radiation that caused an air-monitoring alarm below ground to go off about 11:30 p.m. local time on Friday. That was the first such mishap since the facility opened in 1999.

The plant, located in southeastern New Mexico near Carlsbad, is a repository for so-called transuranic waste shipped from other federal nuclear laboratories and weapons sites. The waste includes discarded machinery, clothing and other materials contaminated with plutonium or other radioisotopes heavier than uranium.

No workers were underground when high levels of radioactive particles were detected in the vicinity of one of the plant's waste-disposal platforms and none of the 139 employees working above ground were exposed to contamination, Energy Department officials said.

They initially said a filtration system designed to remove 99.97 percent of contaminants had prevented radiation from reaching the surface and extensive early testing of air and surfaces above ground showed no radioactive particles associated with the accident.

Airborne radioisotopes can be harmful if inhaled or swallowed. Franco said the minute amounts detected above ground posed no threat to people or the environment but an investigation was ongoing.

"Even though it's well below levels established by the EPA to ensure protection of public health, it's a very serious thing," he said at a news conference Thursday afternoon. "WIPP is not intended to be in this kind of condition."

Secretary of New Mexico Environment Department Ryan Flynn said the state would be conducting a parallel probe into the incident.

"Radiation is simply not supposed to be released outside this facility. It's not supposed to be released inside the underground. Any type of release is unacceptable and disconcerting," he said.

Inbound waste shipments had already been suspended at the site since an underground truck caught fire earlier this month.

No one has been below ground since the release was detected last week and it may be several weeks before teams are allowed in the ancient salt formation to determine the source of the leak, said Franco. Just a few dozen essential personnel, including security offices, remain at the site.

Franco said indications suggest a drum or drums containing radioactive waste may have breached for reasons that are not yet known.

Radiation levels have steadily decreased underground, suggesting the release was a one-time event, said Franco.

The facility in the Chihuahuan Desert normally receives up to 6,000 cubic meters of radioactive waste a year and employs more than 800 government workers and contractors.

It was unclear on Thursday whether waste intended for the repository would be shipped elsewhere and when the plant would resume operations.

(Reporting by Laura Zuckerman; Editing by Dan Whitcomb and Ken Wills)