The Japanese government on Wednesday initiated procedures to grant Japanese firms the right to conduct test drilling for potential gas and oil fields in the East China Sea, the Kyodo news agency reported.

Japan's Ministry of Economy, Trade and Industry has asked relevant authorities to review applications from companies which want to explore the fields, said the report.

A number of Japanese companies originally submitted applications to conduct test drilling in the area in the 1960s but the government shelved the applications on the grounds that demarcation of the sea area remained unsettled, Kyodo said.

China and Japan remain divided over the issue of a demarcation line in the waters of the East China Sea.

China neither accepts nor acknowledges the "median line" unilaterally drawn by Japan without discussion between the two countries.

The Chinese government is calling for negotiation to solve the issue peacefully.

Last year, Japan began conducting a survey on deep-sea resources in waters east of the "median line," a move which aroused serious concerns from China which said it would never accept such a provocative act.