Japan said a Chinese frigate sailed within 24 miles (38 kms)of the contested territory, the islands known as the Senkaku in Japan and the Diaoyu in China, shortly after midnight.
Japan's Vice Foreign Minister Akitaka Saiki summoned the Chinese ambassador in Tokyo at around 2 a.m. (1700 GMT Wednesday) to "express a serious concern," the government said in a statement.
Japanese and Chinese coastguard vessels frequently face off around the islands as both sides press their claims. Until now neither has dispatched warships to nearby waters, because doing so would inflame tensions and remove a buffer against potential armed conflict.
"We are worried that this action raises tensions to a higher level," Japan's Chief Cabinet Secretary Yoshihide Suga said at a regular press briefing in Tokyo.
"Related ministries are working together to deal with thisand we will work closely with the U.S.," Suga said.
China's Defence Ministry said on Thursday it was looking into the reports that one of its navy ships sailed close to the disputed islands, adding its navy had every right to operate inChinese waters.
"Chinese naval ships sailing through waters our country hasjurisdiction over is reasonable and legal. No other country has the right to make thoughtless remarks about this," it said in a statement sent to Reuters.
While the U.S. has not endorsed Tokyo's territorial claim to the islands, which lie about 220 kms (135 miles) northeast of Taiwan, it has said the Japanese-controlled territory fallsunder its security treaty with Tokyo that obligates Washington to defend Japan against attack.
"We are aware of the reports and have been in touch with the Japanese government," U.S. Deputy Assistant Secretary of State for East Asian and Pacific Affairs, Colin Willett told reporters by telephone from Washington.
"Until I have a little more detail, I can't really comment on exactly what (Washington's) reaction is," she added.
The Chinese frigate stayed in the waters around the Senkaku/Diaoyu waters for about an hour before sailing toward the Chinese coast.
Countries can police their contiguous zone, adjacent to thedisputed territory, for customs and immigration violations, butcan't prevent passage by other nations' vessels.
Complicating the situation for Tokyo, three Russian naval vessels also sailed close to the islands at around the same time as the Chinese warship, raising concern in Japan of a coordinated show of force by Beijing and Moscow.
Russia and Japan are locked in a separate territorial dispute over the return of islands seized by Moscow at the endof World War Two.
Suga said the government was investigating to uncover any link between the movements of Chinese and Russian vessels.
The incidents come as Japan, the United States and India prepare to begin a major joint naval exercise, dubbed Malabar, from Friday in the nearby Western Pacific.
As China pushes its claims in the neighbouring South ChinaSea, which Japanese Minister of Defence Gen Nakatani describedlast week as "unilateral and coercive," Tokyo and Washington are worried Beijing will look to extend its influence into the East China Sea and beyond.
Japan's island chain there, including Okinawa which hosts the biggest concentration of U.S. military personnel in Asia,stands in the way of unfettered access to those seas. Japan'smilitary is reinforcing the islands with radar stations and anti-ship missile batteries.//Reuters