China's powerful Central Military Commission has approved the formal establishment of a military garrison for the disputed South China Sea, state media said, in a move which could further boost tensions in already fractious region.

The Sansha garrison would be responsible for "national defence mobilisation ... guarding the city and supporting local emergency rescue and disaster relief" and "carrying out military missions", the Xinhua news agency said on Sunday.

China has a substantial military presence in the South China Sea and the move is a further assertion of its sovereignty claims after it last month upped the administrative status of the seas to the level of a city, which it calls Sansha.

Sansha city is based on what is known in English as Woody Island, part of the Paracel Islands also claimed by Vietnam and Taiwan.

China took full control of the Paracels in 1974 after a naval showdown with Vietnam.

Though Sansha's permanent population is no more than a few thousand, mostly fishermen, its administrative responsibility covers China's vast claims in the South China Sea and its myriad of mostly uninhabited atolls and reefs.

The state-run Vietnam News Agency said Vietnam had protested against the Chinese decision.

Potential military flashpoint

It cited a month-old statement by a senior official that the designation of "the so-called Sansha city" was illegal and overlapped with districts Vietnam identified as its own.

Earlier this month, hundreds of Vietnamese demonstrated in Hanoi against China's establishment of Sansha city and its
invitation to oil firms to bid for blocks in offshore areas that Vietnam claims as its territory.

The South China Sea has become Asia's biggest potential military flashpoint as Beijing's sovereignty claim over the huge
area has set it against Vietnam and the Philippines as the three countries race to tap possibly huge oil reserves.

Southeast Asian states sought to save face on Friday with a call for restraint and dialogue over the South China Sea, but made no progress in healing a deep divide about how to respond to China's growing assertiveness in the disputed waters.