A Royal Navy warship has sailed close to islands claimed by Beijing in the South China Sea, a move denounced by China as a "provocation".

In a sign of Britain increasingly flexing its military muscle in the region, HMS Albion last week passed by the Paracel Islands, where it was reportedly confronted by the Chinese military.

The Albion, a 22,000 ton amphibious warship carrying a contingent of Royal Marines, was on its way to Ho Chi Minh City, where it docked on Monday after a deployment in and around Japan.

Beijing dispatched a frigate and two helicopters to challenge the British vessel, but both sides remained calm during the encounter, a source told Reuters.

China said Britain was engaged in "provocation" and that it had lodged a strong complaint. In a statement to Reuters, the Foreign Ministry said the ship had entered Chinese territorial waters around the Paracel Islands on August 31 without permission, and the Chinese navy had warned them to leave.