A boat with Taiwanese activists who had intended to land on disputed Japanese-controlled islands returned home Thursday after coastguard vessels from the two sides converged and duelled with water cannon.

The boat, carrying seven people including four Taiwanese activists, gave up a plan to land on the East China Sea islands after being blocked by Japanese coastguard vessels as it sailed within 17 nautical miles of the archipelago.

The boat reached Taiwan around 10:00pm (1400 GMT).

"We fired water cannon at each other," Taiwanese coastguard spokesman Shih Yi-che said of the confrontation.

The disputed islands, in an area where the seabed is believed to harbour valuable mineral reserves, are known as Senkaku in Japanese and Diaoyu in Chinese. Both China and Taiwan claim them.

As the standoff unfolded, three Chinese surveillance vessels were positioned a few nautical miles off, the Taiwanese coastguard said.

It added that it was the first time ships from China had been spotted near a Taiwanese-Japanese incident, and that it had sent a radio message to the three boats to keep their distance in order not to complicate matters.

The incident came at a time of growing regional concern over the intensified friction over the islands between China and Japan, with both Beijing and Tokyo recently scrambling fighter jets to assert their claims to the area.

The Japanese coastguard confirmed that it took action after encountering the Taiwanese vessel.

"Our patrol boat carried out restrictions on the vessel such as blocking its path and discharging water," it said in a statement.

"The vessel left our country's contiguous zone at around 1:30pm (0430 GMT) and continued sailing west-southwest away from the Senkakus."

The activists, who set off in the early hours, had hoped to place a statue of the Goddess of the Sea on the islands, to protect Taiwanese fishermen in the area.

They had also intended to "maintain sovereignty" in defiance of Japan's control, said Hsieh Mang-lin, the Taiwanese chairman of the Chinese Association for Protecting the Diaoyutais (Diaoyu Islands).

Taiwan's coastguard said four of its vessels on routine patrols in the area had protected the activists' boat.

"The coastguard will protect our people's voluntary actions to defend the Diaoyu islands. Coastguard vessels will go wherever the fishing boat is... to defend our sovereignty and protect our fishing rights," it said in a statement.

A Japanese foreign ministry spokesman said officials at the nation's de facto embassy in Taipei, established in the absence of formal relations, had been in touch with the Taiwanese government about the incident.

"We have repeatedly called on the Taiwan side to take proper action in order to prevent an unfavourable situation from arising in the favourable Japan-Taiwan relations," he said.

Coastguard vessels from Japan and Taiwan also exchanged water cannon barrages in September after dozens of Taiwanese boats were escorted by patrol ships into the islands' waters.

Previous activist landings have resulted in the arrest and deportation of those setting foot on what Japan says has been its indisputable territory for more than a century.

The rocky island outposts have been the scene of a diplomatic tussle between Japan and China for months.

Japan's government nationalised three of them in September by taking them out of private Japanese ownership.

Since then, Beijing has repeatedly sent government ships into the waters. In December a Chinese government plane overflew them, leading Japan to scramble fighter jets.

Earlier this month both militaries had jets in the area and Japanese newspapers have reported that Tokyo is mulling allowing its pilots to fire warning shots.

While most commentators believe Asia's two largest economies will find some way to work around the problem, which has rattled relations for decades, some are warning that a mis-step could lead to armed confrontation.

burs/ia