BEIJING/HANOI (Reuters) - China said on Wednesday that its forces had boarded a Vietnamese trawler last month in disputed waters in the South China Sea and confiscated explosives used for fishing, rejecting accusations from Vietnam that its ships had been attacked.

Vietnam said two Chinese rubber dinghies took control of one Vietnamese fishing boat that was fishing near the Paracel islets, confiscating property. Chinese personnel "intruded and destroyed" the boat and beat up fishermen, the Vietnamese Foreign Ministry said in a statement on Tuesday. Chinese boats took control of two other boats, the ministry added, and confiscated some of their property.

But China said a Vietnamese fishing boat had used explosives to fish in disputed waters. The Chinese personnel boarded the boat and confiscated the explosives, Chinese Foreign Ministry spokesman Hua Chunying said at a daily briefing. "We urge the Vietnamese side to use effective measures to strengthen the education and management of their fishermen, and stop illegal fishing activities in the waters around the Xisha islands," Ms Hua said, using the Chinese name for the Paracel Islands. She made no mention of other Vietnamese vessels.

Vietnam had made a demand of compensation to a representative of the Chinese embassy in Hanoi, said Vietnamese Foreign Ministry spokesman Le Hai Binh. "Vietnam requests China investigates and strictly handles the acts by Chinese authorities, not to repeat the acts and to compensate Vietnamese fishermen fairly," the spokesman said, adding that the Chinese actions violated Vietnam's sovereignty.

Ties between the Communist neighbours have soured this year over competing territorial claims in the potentially energy-rich waters which straddle key shipping lanes.

Relations sank to a three-decade low this year after China deployed an oil rig to waters Vietnam claims as its exclusive economic zone, sparking a wave of riots and bloody clashes between Vietnamese and Chinese workers in Vietnam.

China claims almost the entire South China Sea, believed to be rich in deposits of oil and gas resources. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims in the waters where US$5 trillion (S$6.31 trillion) of ship-borne goods pass every year.