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TOKYO (Reuters) - An update of Japan's long-term defense policy to be unveiled next month will call for stronger air and maritime surveillance capabilities and the improved ability to defend far-flung isles as concerns rise about China's growing military assertiveness.
The policy review, in the works since hawkish Prime Minister Shinzo Abe took office last December, is being finalised as tensions mount between Japan and China over tiny islands in the East China Sea, known as the Senkaku in Japan and the Diaoyu in China.
"The security environment surrounding our country has become increasingly grave," said a draft outline of the policy shown to ruling party lawmakers and obtained by Reuters on Thursday.
"China is proceeding with wide-ranging and rapid modernisation of its military strength and expanding and stepping up activities in the sea and air surrounding Japan," the draft said.
It also cited concerns about North Korea's nuclear and missile programmes and Russia's military modernisation.
Graphic: China's new air defense zone -- link.reuters.com/byr84v
Tensions have ratcheted up since Beijing on Saturday announced a new airspace defense zone that includes the skies over the long-disputed islands and said planes flying in the area would have to notify Chinese authorities. Japan and its ally the United States have sharply criticised the move.
Japan's new defense programme, an update of a defense posture last reviewed in 2010 under the now-opposition Democratic Party, would strengthen the military's monitoring capability to ensure air and maritime safety as well as improving intelligence-gathering capabilities, the draft said.
The Defence Ministry has already said it was considering buying unmanned surveillance drones.
The outline says Japan will beef up its ability to send troops to far-flung islands. The ministry is considering creating an amphibious unit similar to the U.S. Marines.
Media reports have said Japan planned to deploy high-speed maneuver combat vehicles that can be sent to remote islands by air and was considering acquiring high-speed small escort ships to counter the threat of sea mines and submarines.
The document also pledges to strengthen the alliance with the United States, including through a review of defence cooperation guidelines to be completed by the end of 2014.
The United States does not take a position on the sovereignty of the islands but recognises that Tokyo has administrative control over them.
U.S. Defense Secretary Chuck Hagel assured his Japanese counterpart by telephone on Wednesday that the allies' security pact covers the disputed islands.
The United States has defied China's demand that airplanes flying through the zone identify themselves to Chinese authorities, sending two unarmed B-52 bombers over the islands earlier this week without informing Beijing.
The tensions will loom large during a trip by U.S. Vice President Joe Biden to Japan, China and South Korea next week.
The policy draft also said Japan should enhance its ability to cope with the North Korean missile threat but did not refer to Japan's possible acquisition of the ability to hit enemy targets overseas - a controversial move which would further stretch the limits of its pacifist, post-war constitution.
In a nod to concerns overseas about Abe's hawkish stance, the draft said Japan would keep its purely defensive posture, shun nuclear arms and not become a military power.
Past governments have stretched the limits of the U.S.-drafted constitution but Abe wants to go further, including by easing a self-imposed ban on exercising the right to collective self-defence, or aiding an ally under attack.
Editing by Dean Yates