Skipper free as Japan bids to end row

Japan has released a Chinese fishing boat captain involved in a collision near disputed islands, following intense pressure from China in the worst spat between the Asian neighbours in years.

The move will ease escalating tensions sparked when Japan arrested the captain earlier this month after his trawler collided with two Japanese patrol boats near islands in the East China Sea claimed by both countries.

Beijing suspended ministerial-level dialogue with Tokyo and postponed talks on developing disputed undersea gas fields. Chinese Premier Wen Jiabao earlier this week sternly threatened "further action" against Japan if it did not immediately release the captain.

On Thursday, Beijing said it was investigating four Japanese suspected of illegally filming military targets and entering a military zone without authorisation. China also suspended Japan-bound shipments of rare earth metals critical in advanced manufacturing.

Prosecutors in Okinawa, southern Japan, where the 41-year-old captain, Zhan Qixiong, has been in custody for more than two weeks, last night said they had let him go partly because they did not perceive any premeditated intent to damage the Japanese coastguard boats - but also for diplomatic reasons.

"We decided that further investigation while keeping the captain in custody would not be appropriate, considering the impact on the people of our country, as well as the Japan-China relations in the future," said Toru Suzuki of the Naha, Okinawa, prosecutors' office.