TOKYO (Reuters) - Japanese Prime Minister Yoshihiko Noda said on Saturday that the government is considering buying islands in potentially gas rich territory claimed by both Japan and China, in a move likely to anger Beijing.

The uninhabited islands in the East China Sea are known as Senkaku in Japan and Diaoyu in China.

Noda told reporters in the northeastern city of Iwaki that his government was in contact with the landowner about buying the islands when the lease expires next year.

Earlier this year, Tokyo Governor Shintaro Ishihara proposed using public funds to buy the islands, prompting Beijing to denounce the plan as illegal and reassert its sovereignty.

Diplomatic ties between Beijing and Tokyo hit a low point in late 2010 after Japan's arrest of a Chinese fishing boat captain near the disputed islands, though they have improved since then.

In 2008, Beijing and Tokyo agreed in principle to jointly develop gas fields near the islands, but progress has been slow and Japan has accused China of drilling for gas in violation of the deal.

(Reporting by Tetsushi Kajimoto; Editing by Jeremy Laurence)