TOKYO (REUTERS) - Japan on Friday denied interfering with Chinese military exercises in the western Pacific after Beijing lodged a formal diplomatic protest, saying China's objections were unacceptable and it had acted in line with international law.

Ties between the Asian neighbours have been strained for months by a long and bitter dispute over islands in the East China Sea believed to be surrounded by energy-rich waters, and Japanese Prime Minister Shinzo Abe has said his nation is ready to be more assertive towards China.

China's defence ministry on Thursday slammed Japan's "dangerous provocation" in shadowing the drills, without clearly stating the location. It also said Japan had disrupted the live fire exercises.

Japanese Defence Minister Itsunori Onodera told reporters that Japan had done nothing to interfere with the exercises, which he said were carried out in the sea southeast of the Sakishima island chain, south of the disputed islands known as the Senkaku in Japan and the Diaoyu in China.

"We have carried out the usual precautionary observations in accordance with international law," Mr Onodera said. "China's views are unacceptable."

Chinese defence ministry spokesman Yang Yujun said on Thursday that Japanese patrols of ships and aircraft were gathering information about the exercises.

"This is a highly dangerous provocation, and China's defence ministry has made solemn representations to the Japanese side," he added, according to a transcript of his remarks on the ministry's website.

Mr Onodera said Tokyo's views had been conveyed to Beijing and that Japan was committed to defending its territory.

But he also appeared to hold out an olive branch, saying that clear communications were needed between the two nations.

"For China to carry out regular drills is not illegal, and for us to be cautious is also natural, I believe," he said.

"It's important to set up a Japan-China hot line so suspicion and mistrust doesn't arise between the two sides."

Ties between the two countries took a hit in September 2012 after Japan bought two of the disputed islets from a private owner, setting off a wave of protests and boycotts of Japanese goods across China.

Patrol ships from both nations have been shadowing each other near the islets, raising fears that an accidental collision or other unintended incident could develop into a larger clash. Last week, Chinese military aircraft flew near Japan three days in a row, prompting Tokyo to scramble fighter jets each time.

China on Saturday criticised a Japanese media report saying Abe had approved a policy for Japan to shoot down foreign drones that ignored warnings to exit its airspace.