TOKYO - JAPAN said on Monday it 'cannot accept' China's development of a gas field near a disputed part of the East China Sea after Beijing insisted it was acting within its own waters.

Asia's two largest economies struck a deal in June last year to end a lingering spat over four Chinese undersea gas fields which, Japan said, may extend into its exclusive economic zone.

But Japan has complained about China's development of the nearby Tianwaitian gas field, which Tokyo contends should be untouched until ongoing talks settle its status.

'The area should be under negotiations. The Japanese government expresses its regret that China is unilaterally developing the field,' Chief Cabinet Secretary Takeo Kawamura told reporters.

'Japan cannot accept China's unilateral development,' said Mr Kawamura, the government's spokesman.

Under last year's deal, Japan agreed to invest in one of the four fields and jointly develop an area near another.

They agreed to continue talks on the remaining ones, which China wanted to develop on its own, by freezing further development. The Tianwaitian field was not part of the deal.

'Our understanding is that the status of the ones outside of the political agreement is blank. Therefore the status quo is the way it should be,' Mr Kawamura said.

'We are gathering information at this point. We must take appropriate actions if new steps are made,' he added.

China however said on Sunday the development is in 'China's undisputed territorial waters.' 'The gas field development activities of the Chinese side are being carried out within China's inherent sovereign rights,' foreign ministry spokesman Qin Gang said in a statement on his ministry's website.

Japan and China are two of the world's biggest energy importers. They have been working since 2006 to repair relations, which have long been tense due in part to the legacy of Japanese imperialism. -- AFP