China has warned it may take "further action" against Japan, as Chinese ships briefly entered waters around an island chain the two countries are quarrelling over.

Mass protests have taken place in dozens of Chinese cities sinceJapan announced it had nationalised the Senkaku islands – known as the Diaoyu in China – islands last week.

The protests were fanned on Tuesday by the 81st anniversary of the Mukden Incident, a staged bombing on a Japanese railway that gave the Imperial Japanese army a pretext for invading China in 1931.

Largely forgotten in the West, in China the anniversary is remembered as the National Day of Humiliation.

General Liang Guanglie, China's Defence minister, said Beijing hoped the spat over the islands would "be properly resolved through peaceful ways and negotiations". However, he warned, China "reserves the right to take further actions".

"I want to make it clear that the Diaoyu Islands are China's inherent territory, which is evidenced by history and law. Secretary Panetta and I discussed the issue in our talks," Gen Liang said, referring to the visit of Leon Panetta, the United States Defence secretary, to Beijing.

He blamed Japan for "heating up" the issue with its nationalisation plan.

Japan feels that the US will back it in its claim to the islands, but an unnamed senior US military official told the Washington Post: "I do not think we would allow the US to get dragged into a conflict over fish, or over a rock."

Mr Panetta said that both sides should maintain "open channels of communication" in order to "resolve these disputes diplomatically and peacefully".

Meanwhile, three Chinese patrol ships entered the waters around the islands for a total of 40 minutes before withdrawing, said the Japanese coastguard. A total of seven patrol ships were in the area, while 1,000 Chinese fishing boats are thought to be in the wider area.

The Yuzheng-35001, operated by the Chinese Agriculture Ministry's Fisheries Bureau, was located 26 miles northwest of Uotsuri Island.

Warned by the Japan Coast Guard not to enter Japanese waters, the vessel responded that the islands are an integral part of China's territory and that it is carrying out legitimate operations.

Earlier in the day, two Japanese nationals briefly landed on Uotsuri Island, the largest rock in the chain, but left aboard a small boat shortly afterwards. A spokesman for the Chinese Foreign ministry condemned the act as a provocation.

In Beijing, around a thousand protesters continued their march outside the Japanese embassy, which now sports some broken windows. Corralled by police into a track surrounded by hard barriers, the marchers walked in groups, holding banners and chanting. On each pass of the embassy, protesters hurled eggs and bottles.

The situation in other Chinese cities also appeared to be tightly under the control of the authorities.----

Source: http://www.telegraph.co.uk/news/worldnews/asia/china/9550614/China-warns-it-is-ready-for-further-action-against-Japan-over-islands.html