Tokyo: Japan said today it was close to reaching a deal with China on joint development of gas fields in disputed waters, the focus of a long-running spat between the two Asian giants.

Japanese news reports said that the two governments had reached a final solution after exhaustive talks and were expected to announce an agreement as soon as this week.

In the reported solution, Japan would invest in a gas field that is controversially operated by Beijing in the East China Sea.

The top spokesman for the Japanese government said that talks were in their last stages.

"I know that the negotiations are now about the final details," Chief Cabinet Secretary Nobutaka Machimua told reporters, without elaborating.

A spokeswoman for China s foreign ministry confirmed that the two sides had made "important progress" in their discussions.

Ending the row would remove a major obstacle in relations between Japan and China, which have been working to ease longstanding political tensions.

China started drilling in the area in 2003,even though Japan believed that the gas fields crossed the median line. Japan has previously said that Beijing may be siphoning off what Tokyo considers to be its own gas reserves.

In 2004,amid sour political relations, a Chinese nuclear submarine intruded into Japan waters near the gas fields, setting off a two-day chase on the high seas.

Japanese media reports said the two nations had reached final agreement on how and where to conduct joint gas exploration in the disputed waters and about the Japanese investment in the project.

Source : PTI