The prime minister of Japan has confirmed that his country is close to reaching an agreement with China over long-disputed offshore natural gas reserves.

Coming ahead of next month's summit of leading industrial nations in Tokyo, Yasuo Fukada explained that a deal is due to be made concerning the reserves in the East China Sea.

Though the field is estimated to hold just 93 million barrels of oil, enough to meet Japan's energy needs for just three weeks, it has long been a contentious issue between the two countries, with even the name fiercely disputed: for China, the field is called Chunxiao, while the Japanese call it Shirakaba.

Such tensions reached a head just four years ago when both states sent in military ships and planes to patrol the disputed waters, with a Norwegian vessel hired by Japan for surveying purposes turned back by the Chinese.

While no formal details were given, it is believed that the deal will see Japanese money invested in Chinese companies which carry out drilling in the area, the New York Times has reported.