BEIJING (AFP) - China late Sunday issued a lengthy defence of its use of an oil rig in contested waters that is at the centre of a bitter dispute with Vietnam.

A statement on the foreign ministry website, relayed in full by the official news agency Xinhua, said the drilling operations near the Paracel Islands fell within China's "sovereignty and jurisdiction".

It also accused Vietnam of acting aggressively towards Chinese personnel, accusing Vietnamese vessels of "illegally and forcefully disrupting" work there and of ramming Chinese boats.

The oil rig is in the vicinity of the contested Paracel Islands, which are known as Hoang Sa in Vietnam and called Xisha by Beijing.

Relations between Vietnam and China have plummeted over the oil rig's presence, which has worsened an increasingly heated dispute over territorial claims in the area.

On Friday, Vietnam released dramatic footage showing a large Chinese ship chasing and ramming one of its fishing boats which then sank near the rig.

The video images, shot from a nearby Vietnamese vessel, showed a much larger Chinese ship racing after a small wooden Vietnamese fishing boat, ploughing into it and causing it to tip over and sink.

The communist neighbours have traded accusations over the May 26 sinking incident, with Hanoi decrying an "inhuman act" by China, which blamed intrusion by the Vietnamese vessel.

Tensions over the oil rig sparked violent anti-Chinese riots in Vietnam last month. Beijing says four Chinese citizens died in the unrest, while Vietnam says there were three Chinese fatalities.

China claims nearly all of the South China Sea, even waters approaching the coasts of its neighbours, and has become increasingly assertive in staking those claims.

Vietnam, the Philippines, Brunei, Malaysia and Taiwan have competing claims to parts of the sea.