Chinese captain Zhan Qixiong was arrested after his boat collided with two Japanese ships in the East China Sea [AFP]

China's official Xinhua news agency says China has released three Japanese citizens but a fourth remains in custody. Japan has confirmed the report.

Xinhua said the three men were freed on Thursday after admitting to violating Chinese law but the fourth, identified as Sadamu Takahashi, remained under house arrest and was being investigated for illegally videotaping military targets.

They had been detained outside the northern city of Shijiazhuang, in Hebei province, on September 21 at a time of heightened diplomatic tensions between the two countries.

The row was triggered by a collision on September 7 between a Chinese fishing trawler and two Japanese patrol boats near a contested island in the East China Sea.

All four men are employees of Fujita Corp, a Tokyo-based construction and urban redevelopment company. The company has said that the men were in China working on a project to dispose of chemical weapons abandoned in China by the Japanese military at the end of the second world war.

Japan released the fishing boat captain last weekend and urged China to resolve the case of the four Japanese nationals as the first step towards repairing ties.

China's foreign ministry has denied any link between the detentions and the earlier islands incident.

In a separate development, Toshimi Kitazawa, the Japanese defence minister, is reported to be considering seeking talks with his Chinese counterpart in Vietnam next month to repair strained bilateral ties.

Japan's Kyodo news agency said, citing unnamed government sources, that Tokyo will sound out Beijing about the plan for Kitazawa to meet Liang Guanglie, the Chinese defence minister.

China has suspended high-level exchanges with Japan in the wake of the islands incident.