Japan will nationalise a group of islands at the centre of a territorial row with China, the government said Monday, prompting an angry rebuke from Beijing which vowed to "never yield an inch".
"During the ministerial meeting today, we agreed that we will obtain the ownership of the three Senkaku islands as quickly as possible," Chief Cabinet Secretary Osamu Fujimura told reporters, using the Japanese name for what China calls Diaoyu.
The decision to purchase the islands, which will be formally owned by Japan's Coast Guard, was aimed at their "quiet and stable maintenance", he added.
Chinese Premier Wen Jiabao however insisted the islands were "an inherent part of China's territory".
"On issues concerning sovereignty and territory, the Chinese government and people will never ever yield an inch," the official Xinhua news agency quoted Wen as saying later Monday.
Noda has been somewhat bounced into the deal by Shintaro Ishihara, the outspoken right wing governor of Tokyo, who said he wanted them developed to protect Japanese sovereignty.
China has previously reacted with muted irritation since reports emerged that the Japanese government was going to buy the chain from their private landowners.
Analysts say Noda's solution -- owning the islands and not doing anything with them -- is the best thing he could do because it will go some way to assuaging nationalist fervour at home while not annoying China too much.
Fujimura said the purchase is "not an issue that would stir problems with other countries".
"Having said that, we hope that it doesn't influence broader Japan-China relations. After the Chinese side expressed interest, diplomats from both countries have kept in close contact."
Often testy Japan-China ties took a turn for the worse in August when pro-Beijing activists landed on one of the islands.
They were arrested by Japanese authorities and deported. Days later about a dozen Japanese nationalists raised their country's flag on the same island, Uotsurijima, prompting protests in cities across China.
In Beijing, the foreign ministry reiterated China's claims over the islands, which lie around 200 kilometres (125 miles) from Taiwan, and 2,000 kilometres from Tokyo.
China's Foreign Minister Yang Jiechi lodged a "strong protest" with the Japanese ambassador, calling the purchase "illegal" and "invalid".
"This in no way will change the historic fact of Japan's usurpation of China's territory, nor will it shake in the least China's territorial sovereignty over the Diaoyu Island and adjacent islands," a statement posted on the foreign ministry website quoted Yang as saying.
"The Chinese government and people will never allow our territory or sovereignty to be violated or damaged and will resolutely safeguard sovereignty over the Diaoyu Island and adjacent island."
"The Chinese side strongly urges the Japanese side to rescind the mistaken decision of 'purchasing the island'," he added.
Analysts say both sides are trying to reduce the diplomatic temperature as they eye the 40th anniversary of normalised ties at the end of the month.
Noda did not hold a formal summit with China's President Hu Jintao on the sidelines of the weekend's Asia-Pacific economic summit in Vladivostok, but the two did meet informally.
Japan's government currently leases four islands and owns a fifth. It does not allow people to visit and has a policy of not building anything there.
The islands sit in a strategically important shipping area and valuable mineral resources are thought to be nearby.