Members of the Japanese Cabinet are expected to meet, possibly next Tuesday, to formally endorse the plan to put the Senkakus under government control for around a reported $25.5 million, Kyodo news agency reported.
The government is in the final stages of reaching a deal by the end of September to purchase three of the islets -- Uotsuri, Kita-Kojima and Minami-Kojima -- from their private owner to make the country's ownership clear, Kyodo said.
The islands and their accompanying rocky outcrops are around 100 miles north of Japan's Ishigaki Island and 116 miles northeast of Taiwan. At the end of World War II in 1945 they were under U.S. jurisdiction as part of the captured Japanese island of Okinawa. They have been under Japanese jurisdiction since 1972 when Okinawa was returned to Japan.
The Japanese government, which has been leasing four of the five islands from the Kurihara family for many years, recently sent in a survey team. Landings are by government permission only and rarely granted, meaning the islands remain isolated.
But a Chinese Foreign Ministry spokesman said this week that China lodged a diplomatic complaint with Japan over the survey of the Senkakus, called the Diaoyu Islands by Beijing, a report by China's government-run news agency Xinhua said.
"Any unilateral action by Japan regarding the Diaoyu Islands is illegal and invalid," Chinese government spokesman Hong Lei said.
The Japanese announcement came as U.S. Secretary of State Hillary Clinton was on an official visit to Beijing where she told Chinese President Hu Jintao that Sino-U.S. relations are strong and solid despite differences.
During the visit, both sides reiterated their desire for peaceful settlements of territorial disputes in the South China Sea. China has been asserting its sovereignty over some of the resource-rich islands. Taiwan, the Philippines, Vietnam, Malaysia and Brunei also have overlapping claims for some of the islets.
For its part, China has been pushing for bilateral agreements to solve the territorial disputes.
However, the United States has urged multilateral negotiations and wants the Association of Southeast Asian Nations and China to work toward a code of conduct for settling the disputes.
China also wants the United States to maintain its often-stated neutral position regarding any of the disputes, especially the Senkakus which it fears might bring U.S. military interference.
Last month China said it strongly opposes any application of the U.S.-Japan security treaty over the China-Japan dispute. China reiterated its stance during meetings in Washington between Cai Yingting, deputy chief of the General Staff of the Chinese People's Liberation Army, and senior U.S. military and government officials.
Another major territorial dispute is that between China and Vietnam over various Spratly islands and reefs -- some only visible at low tide. The isolated outcrops also are disputed by Brunei, Taiwan, Malaysia and the Philippines, although Brunei doesn't occupy any of the islands.
The Spratly dispute has erupted into open military confrontation on occasions, such as the brief 1988 Johnson South Reef skirmish between China and Vietnam in which about 70 Vietnamese military personnel were killed.
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