Norway said Tuesday it supports China's bid for observer status on the Arctic Council despite a diplomatic row over the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo.

"The areas and the potential for cooperation between our two countries are significant.... Norway has supported and still supports China's ambition to become a permanent observer on the Arctic Council," Foreign Minister Jonas Gahr Stoere told parliament during a review of the country's foreign policy.

Stoere's comment appears to deny a report published last month by the Norwegian daily of reference Aftenposten, which quoted an unidentified "highly-placed diplomatic source" saying Norway would block the Chinese bid as long as diplomatic relations between the two countries have not been normalised.

"We want to have a dialogue on this, just like we have dialogues with all other candidate countries," Stoere said.

"We are reaching out and stressing that the two countries have a joint responsibility to be forward-looking out of mutual respect and interest," he said.

Even though global trade between the two countries has continued to prosper, diplomatic relations between Norway and China have remained in deep-freeze since the awarding in Oslo of the Nobel Peace Prize to imprisoned dissident Liu Xiaobo, whom Beijing considers a "criminal", in October 2010.

Beijing has refused to have any high-level contact with Norway to protest the prize, which it described as a "farce" and what it perceived as "meddling" in its affairs.

Norway has stressed that the Nobel Committee is completely independent.

Like a number of other countries and entities including the European Union, Japan and South Korea, China has applied for permanent observer status on the Arctic Council, which is an eight-country intergovernmental forum dedicated to questions concerning the icy region.

The region has taken on an increasing strategic importance with the opening up of a new shipping route through the region as the Arctic icecap melts.

Compared with traditional routes through the Suez Canal or the Cape of Good Hope, the Northeast Passage would considerably shorten the voyage between Europe and China.

The members of the Arctic Council are Canada, Denmark/Greenland, Finland, Iceland, Norway, Sweden, Russia and the United States.

The issue of candidacies will be raised at the body's deputy ministers meeting in Stockholm on May 15, as well as at the next ministerial meeting in May 2013, according to the Norwegian foreign ministry.