A top Japanese government spokesman said earlier on Monday that Tokyo was lodging an official diplomatic protest over the visit by Mikhail Mishustin to one of four Russian-held islands to which Japan lays claim.

Japan, which Russian news agencies said had summoned the Russian ambassador over the matter, calls the islands the Northern Territories, while Russia calls them the Kuril Islands.

The territorial dispute over the islands dates to when the then-Soviet Union seized them at the end of World War II, and has prevented the two countries from signing a formal peace treaty.

Mishustin was quoted by Russian news agencies as saying during the visit that Moscow planned to set up a special economic zone with no customs duties and a reduced set of taxes on the island chain.

Russia's foreign ministry summoned the Japanese ambassador in Moscow to protest over Tokyo's behaviour.

"Russian Deputy Foreign Minister Igor Morgulov conveyed a strong protest to the Japanese side in connection with hostile steps taken by official Tokyo in recent days," the ministry said in a statement.

The Kremlin said it valued and wanted to improve relations with Tokyo but saw nothing wrong with Mishustin's trip.

"As for the prime minister's trip to Iturup island, he visits those Russian provinces that he sees fit," President Vladimir Putin's spokesman Dmitry Peskov told reporters.

Peskov said Moscow would continue to work with Tokyo towards agreeing a peace treaty.

Mishustin said he would discuss with Putin what he called an "unprecedented" set of economic measures aimed at developing the islands.

"This would be interesting ... for Japan as well, which could create jobs and work with you if it is interested," he was cited as telling local businessmen by Russia's RIA news agency.

Australian Associated Press