Japan has approved its biggest ever defence budget, as it attempts to counter an increasingly assertive China and push through an unpopular move to relocate a US military base on Okinawa.

The cabinet on Thursday approved plans to spend 5.05tn yen (£28bn) on defence for the year beginning next April, with a focus on protecting a string of remote islands in its southernmost reaches, including those claimed by Beijing.

Military spending will rise 1.5% from this year – the first time it has topped 5tn yen and the fourth annual increase under the conservative prime minister, Shinzo Abe, who ended a decade of defence budget cuts after taking office in late 2012.

On the defence ministry’s procurement list are 17 SH-60K naval patrol helicopters, three Global Hawk drones, six F-35 stealth fighters and four V-22 Osprey tilt rotor aircraft.

The rise is in line with Japan’s more assertive defence policy under Abe, as he seeks to counter Chinese influence and lift the postwar legal constraints on his country’s military.

In September, Abe demonstrated his commitment to a more robust military by pushing through security bills that could lead to Japanese troops fighting abroad for the first time since the end of the second world war.

The new security laws reinterpret Japan’s “pacifist” constitution to allow Japanese troops to exercise the right to collective self-defence, or coming to the aid of an ally – most likely the US – overseas.

Japan’s higher defence spending is being fuelled in part by tensions with China over freedom of navigation and the Senkakus, a group of islands in the East China Sea that are administered by Tokyo but claimed by Beijing.

Despite the recent increases, Japan’s higher military spending pales in comparison to that of China, which spent £87bn in 2014. China is second only to the US, which spent £390bn on defence in the same year, while Japan was ranked seventh, according to the International Institute of Strategic Studies in London.

Much of the hardware included in Japan’s new budget is designed to monitor outlying territories and repel any attempt to invade the Senkaku islands, which are known as the Diaoyu in China.

Last week, officials in Tokyo confirmed that Japan planned to deploy thousands of troops and build missile batteries on islands close to the Senkakus to check Chinese military influence.

On Tuesday, Japan said it had identified a Chinese ship equipped with gun turrets 18 miles off the Senkaku islands. Chinese coastguard ships regularly sail in waters near the contested territories, but this was the first time an armed vessel had been spotted in the area, prompting an angry protest from Tokyo.

A Chinese foreign ministry spokesman repeated Chinese claims to the islands adding: “Patrols by Chinese coastguard ships in the relevant seas are beyond reproach. The equipment on Chinese coastguard vessels is standard equipment and no different from international practice.”

Japan also set aside almost 60bn yen for the relocation of Futenma, a US marine base on Okinawa, to a more remote location on the island’s east coast. The government spent 24.4bn yen on the Futenma relocation during the current financial year.

Tokyo and Washington are determined to push ahead with the move – first agreed in 1996 – despite opposition from Okinawans and the island prefecture’s governor, Takeshi Onaga.

While many islanders support the closure of Futenma, which stands in the middle of an overcrowded city, most want the new base to be moved off Okinawa altogether.

The plan favoured by Japan and the US would see the construction of an offshore runway in Henoko, whose pristine waters contain one of the few remaining habitats of the dugong.

Local people are also concerned about air and noise pollution, and the risk of aircraft accidents.

