BEIJING (AFP) - China said on Tuesday that it was "legitimate and necessary" for it to take action against Vietnamese vessels that entered its waters illegally, after Hanoi accused it of attacking a fishing boat.

A Vietnamese boat was fishing near the contested Paracel Islands last week when it was "chased and shot at by a Chinese vessel" setting the cabin on fire, Hanoi's foreign ministry said on Monday.

It "strongly" protested over the incident it called a "serious violation" of its sovereignty.

But, using the islands' Chinese name, Beijing's foreign ministry spokesman Hong Lei told reporters at a regular briefing: "The Xisha islands are China's inherent territory, China has indisputable sovereignty over the Xisha islands.

"It is necessary and legitimate for China to take action against a Vietnamese shipping boat that has entered China's waters for illegal activity.

"According to verification with the relevant party, no damage was caused to the fishing boat from Vietnam at the time."

Spokesman Hong declined to confirm whether the Chinese vessel had shot at the Vietnamese boat when asked about the incident by AFP.

Vietnam and its giant neighbour have long-standing territorial disputes over the Spratly and Paracel Islands, which both countries claim, and often trade diplomatic barbs over oil exploration and fishing rights.

Beijing claims virtually all of the South China Sea, which includes both island groups and is believed could sit atop huge oil and gas reserves as well as being home to important fishing grounds.

Hanoi says hundreds of fishing boat crews have been arrested by Chinese authorities in recent years.