Beijing will establish a military garrison on a group of disputed islands, China's defence ministry says.

The troops will operate from Sansha in the Paracel Islands, one of two archipelagos in the South China Sea that are claimed by both China and Vietnam.

The garrison, approved by the Central Military Commission, 'will be responsible for the Sansha area national defence mobilisation and reserve forces activities', the defence ministry announced on its website on Monday.

The ministry did not say when the garrison would be established, but the decision was likely to upset Hanoi.

A move by Beijing last month to designate Sansha as its administrative centre for the Paracels and the Spratly Islands prompted a rare demonstration on Sunday in the Vietnamese capital.

China and South Vietnam once administered different parts of the Paracels but after a brief conflict in 1974 Beijing took control of the entire group of islands. Vietnam holds several of the larger Spratly Islands.

China says it owns much of the South China Sea, while the Philippines, Taiwan, Brunei and Malaysia each claim portions.

Disputes have flared in recent weeks, with Vietnam and the Philippines criticising what they call Chinese encroachment.

In June, the state-backed China National Offshore Oil Corporation invited bids to explore oil blocks in the disputed waters, a week after Vietnam adopted a law placing the Spratlys under its sovereignty.

A July 13 meeting of the Association of Southeast Nations broke up without a joint statement for the first time in 45 years because members could not agree on how to refer to China's actions in the disputed waters.

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China plans garrison for islands