Media reports from Kyodo news agency in Japan have indicated that the government will pay 2.05bn yen ($26m, £16.4m) to buy the islands known as Senkaku in Japan and Diaoyu in China, from their private owner. There was no confirmation from officials, but the reports were carried by major Japanese media outlets, citing government sources as validation.
The news reports stated that Shintaro Ishihara, the Tokyo governor, "...will give the money to Noda's government 'swiftly' if it buys the Senkakus, suggesting he could relinquish his earlier plans, which also included the construction of a radio wave relay station and a weather observatory there."
Japan controls the islands, which lie south of Okinawa and north of Taiwan, but China also claims ownership of them, as does Taiwan. The eight uninhabited islands and rocks in question lie in the East China Sea. They have a total area of about 7 sq km and lie northeast of Taiwan, east of the Chinese mainland and southwest of Japan's southern-most prefecture, Okinawa. They are such a source of conflict and importance to each nation, because they are close to strategically important shipping lanes, offering rich fishing grounds and are thought to contain oil deposits.
Japan says it surveyed the islands for 10 years and determined that they were uninhabited. Then, on 14th January 1895 a sovereignty marker which formally added the islands to Japanese territory was erected. The Senkaku islands became part of the Nansei Shoto islands - also known as the Ryukyu islands and now as modern-day Okinawa prefecture.
China’s claim is based on their insistence that the Diaoyu islands have been part of its territory since ancient times, serving as important fishing grounds administered by the province of Taiwan. The Ministry of Foreign Affairs says that this is "fully proven by history and is legally well-founded".
Ishihara had also been seeking to buy the islands, collecting public donations for the purchase by the Tokyo metropolitan government. Chief Cabinet Secretary Osamu Fujimura said the government and owner were in talks but would not comment on details of the discussion. "We are negotiating with the owner while we try to grasp where the situation stands between [the central government] and the Tokyo metropolitan government," he said. An announcement would be made "when we reach a result after completing the process".
A Chinese foreign ministry spokesman said Beijng was watching the situation. "The Chinese government is monitoring developments closely and will take necessary measures to defend its national territorial sovereignty," Hong Lei said.
This news is likely to provoke an angry response from the governments in Beijing and Taiwan, as well as potentially triggering renewed violent reactions from activists in both countries. On Tuesday, two men were arrested in Beijing for ripping the flag off the Japanese ambassador's car, in an apparent protest over the islands.
Tensions regarding the ownerships of the islands have been spilling over since 1996, when a Japanese group established a lighthouse on one of the islands. On one of the many retaliatory sailing journeys to the island, led by Chinese activists, David Chan jumped into the sea and drowned. Since then, there have been sporadic attempts by Chinese and Taiwanese activists to sail to the islands. In 2004, Japan arrested seven Chinese activists who landed on the main island.