Taiwan's defence ministry said Monday it is preparing to set up an air navigation system on the disputed Spratly islands, in a move that could spark fresh tensions in the South China Sea.

Defence ministry spokesman David Lo said the system, known as the "tactical air navigation system", will help guide flights to a runway on Taiping islet, the biggest island in the Spratlys.

"The system is not a weapon and will not pose any military threats to countries in that area," Lo told AFP.

The system consists of a beacon which sends off signals informing approaching aircraft about the location of an airstrip.

Taiwan built a 1,150-metre (3,795-foot) runway on the fortified Taiping islet in mid-2006, despite protests from the other countries with claims on the disputed island group.

Lo would not provide more details of the new project, but the Taipei-based Liberty Times said the contractor which won the bid will start work in late February and construction will take two months.

The system, centred around an eight-meter (26-foot) beacon, will become the landmark building on the flat islet, it said.

Taiwan, Vietnam, Brunei, China, Malaysia, and the Philippines claim all or part of the potentially oil-rich Spratlys.

All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which have a total land mass of less than five square kilometres (two square miles).

One-third of global seaborne trade passes through the South China Sea, which is also believed to encompass huge oil and gas reserves.