The announcement offers a solution to a tense two-day stay-off on the high seas, after the activists boarded a Japanese harpoon ship on Tuesday.
The whalers and conservationists have accused each other of behaving like terrorists, with Japan calling the boarding of the harpoon boat an act of "piracy" and Sea Shepherd saying the men were being held as "hostages".
Japanese officials say they have made repeated attempts to contact Sea Shepherd to arrange a return of the activists, but the group has not responded to a list of conditions for the transfer to take place.
They said they were prepared to release the activists if the Sea Shepherd protest ship, the Steve Irwin, stayed 10 nautical miles clear of the whaler Yushin Maru 2 during the transfer, using a small rubber zodiac boat instead.
|The two sides have accused the other piracy |
and acting "like terrorists" [AFP]
Sea Shepherd must also agree not to attack the whaling vessel during the transfer.
But Paul Watson, Sea Shepherd founder and captain of the Steve Irwin, rejected the conditions, demanding an "unconditional" release and threatening to launch more protest action if the transfer was made directly to his ship.
"We will try and do everything we can to stop them killing whales. That's what we are doing down here… We board poaching vessels all the time," he said.
Japan accused Sea Shepherd of stalling the handover to get more publicity.
Glenn Inwood, a spokesman for the Japanese Institute of Cetacean Research – the body which oversees Japan's whaling program - said if the two sides could not agree on a transfer, the two activists may have to be taken to Japan.
"They have to realise we're not just going to tie up the Yushin Maru to the Steve Irwin vessel. It's just not going to happen like that, there are security risks associated with that," he said.
|Potts and Lane were detained |
on Tuesday [ICR/AFP]
"The Sea Shepherd people can agree to keeping the Steve Irwin 10 nautical miles away and sending a zodiac, or the Australians can intervene and act as an intermediary," he said.
"Otherwise they'll have to stay on board at this stage."
The row over the activists dramatically raised tensions in the Southern Ocean as the Japanese whaling fleet looked to continue its hunt.
Sea Sheperd has said it will do everything it can to block the hunt and has a reputation for pushing the boundaries of peaceful protest over whaling, having used its ship to physically ram Japanese whalers in the past.
The group says its actions are intended to disrupt the hunt and are aimed only at disabling equipment, but critics say such actions put human life at risk as well, especially in the inhospitable Antarctic environment.
Japan plans to hunt almost 1,000 minke and fin whales for what it says is research over the Antarctic summer.
Last year it announced it was abandoning plans to cull 50 humpback whales following international condemnation and a formal protest by 31 countries.