That is the “packing gland,” or “stuffing box.”
Either that nut needs to be tightened a little (note that it should be locked against the thin nut directly behind it, so you’ll need to unlock it, adjust it, and relock it), or it needs to be unspun, the flax packing around it dug out with a dental tool while water sprays in around the shaft, and the packing replaced before retightening the nut so the drip almost stops.
This may sound more difficult than it actually is. It’s a simple system but it is very important to understand how it works and that it’s adjusted correctly. You should probably have a complete replacement of the packing in your spares kit.
Edit: you can do it in the water If you have spares on hand. In fact you should, because the final adjustment is supposed to allow a very slow drip during operation. There isn’t much space between the rotating shaft and the inner radius of the gland, although the water will spritz pretty convincingly when you’re doing the work. You can also have a diver stuff clay, or a trash bag, around the shaft to nearly stop the flow, and then remove it when you’re done.