Image copyright Reuters Image caption There have been anti-Chinese demonstrations in Japan

A ceremony to mark 40 years of ties with Japan has been put off by China as the two countries' row over an island chain continues.

A Chinese official said the ceremony, due to be held on Thursday, was being postponed "until an appropriate time".

Asia's two biggest economies have argued for decades over the Japanese-held islands, known as the Senkaku in Tokyo and the Diaoyu in Beijing.

The unpopulated East China Sea islands may be rich in natural resources.

Japan-China disputed islands The archipelago consists of five islands and three reefs

Japan, China and Taiwan claim them; they are controlled by Japan and form part of Okinawa prefecture

The Japanese government signed a deal in September 2012 to purchase three islands from Japanese businessman Kunioki Kurihara, who used to rent them out to the Japanese state

The islands were the focus of a major diplomatic row between Japan and China in 2010 Q&A: China-Japan islands row

Chinese indignation grew recently when nationalist politicians from Japan visited the chain to commemorate the Japanese dead of World War II, when the country occupied much of eastern China.

Thousands of people have attended angry protest rallies in Chinese cities.

Japan's coast guard reported 20 Chinese marine surveillance ships in the vicinity of the islands last week. They confirmed to Kyodo news agency on Sunday that the last such vessel had left.

The cancellation of Thursday's ceremony was confirmed by the Japanese foreign ministry.

Amid the rising tension, China's first aircraft carrier has been handed over to the navy of the People's Liberation Army, state media report.

The handover ceremony for the 300m (990ft) ship, a former Soviet carrier called the Varyag, took place in the north-eastern port of Dalian after a lengthy refit by a Chinese shipbuilder.

Taiwan also claims the disputed islands, which Beijing maintains are historically part of China.

Sunday saw hundreds of slogan-chanting Taiwanese from right-wing parties and civil groups rally in Taipei.

They called for a boycott of Japanese goods and brandished anti-Japanese placards during the peaceful march.

They went as far as calling for co-operation with the mainland to solve the territorial dispute.

The Associated Press news agency reports that a group of Taiwanese fishermen say they will sail 60 boats to the islands on Monday to protect their fishing grounds.