|Read Senkaku islands Dispute|
News that a deal has been struck is likely to provoke strong criticism from the governments in Beijing and Taiwan, as well as potentially triggering renewed outbursts of violence in both countries.
Tens of thousands of Chinese took to the streets in a dozen cities in mid-August after a group of Japanese nationalists landed on Uotsuri Island and unfurled Japanese flags. Television footage of the protests showed demonstrators ransacking Japanese restaurants and businesses and wrecking Japanese-made cars.
The Japanese government has declined to confirm that a deal has been signed, with a spokesman telling Kyodo News that the discussions were still under way.
According to the reports, a senior official met secretly with a member of the Kurihara family on behalf of Yoshihiko Noda, the prime minister, on Monday. Under the terms of the deal, the contract to transfer ownership of the Senkakus - which China knows as the Diaoyu islands and Taiwan refers to as the Tiaoyutai chain - will be signed by the family and the Japanese government by the end of this month. Read moreAds
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