A Japanese government spokesman says Tokyo has not ruled out stationing officials on an island chain that is also claimed by China, prompting an angry response by Beijing.
Chief Cabinet Secretary Yoshihide Suga said Tuesday in response to a reporter's question that placing government workers on the disputed islands was "one option." He did not elaborate.
Chinese foreign ministry spokesman Hong Lei quickly responded, warning that Japan will have to "accept the consequences" if it "recklessly makes provocative moves."
The comments come a day before the one-year anniversary of Japan's purchase of some of the islands from their private Japanese landowner - a move that sparked days of angry anti-Japan protests in China.
Since then, China has sent increased regular air and sea patrols near the disputed East China Sea territory, in what some see as an effort to challenge Japan's control of the islands.
On Tuesday, Japan formally complained to Beijing over the presence of eight Chinese government ships in the area. The Japanese coastguard says the flotilla is the biggest of its kind since April.
On Monday, Japan scrambled fighter jets in the East China Sea after it spotted what it said was an unmanned aircraft flying toward Japan.
Some fear that such incidents could lead to an accidental clash between the two Asian powers.
The disputed isles are known as Senkaku in Japan and Diaoyu in China.