Vietnamese Prime Minister Nguyen Tan Dung said his government was considering various "defence options" against China, including legal action, following the deployment of a Chinese oil rig to disputed waters in the South China Sea.
Dung’s comments, in an exclusive interview with Reuters, are the first time he has suggested Vietnam would take legal measures, a threat that is likely to infuriate Beijing.
"Vietnam is considering various defence options, including legal actions in accordance with international law," Dung said in an e-mail sent while on a visit to Manila late yesterday.
He did not elaborate on the other options being considered.
"I wish to underscore that Vietnam will resolutely defend its sovereignty and legitimate interests because territorial sovereignty, including sovereignty of its maritime zones and islands, is sacred," he said.
In late March, the Philippines submitted a case to an arbitration tribunal in The Hague, challenging China’s claims to the South China Sea.
It was the first time Beijing has been subjected to international legal scrutiny over the waters. Beijing has refused to participate in the case and warned Manila that its submission would seriously damage ties.
This came as Vietnam and the Philippines, in a rare show of unity, declared they were determined  to oppose Chinese infringement of their territorial waters.
"The president and I shared the deep concerns over the current extremely dangerous situation caused by China's many actions that violate international law," Dung said in a statement after talks with Philippine President Benigno Aquino during a two-day visit to Manila.
"In particular, China's illegal placement of the oil rig and deployment of vessels to protect the rig deep into Vietnam's continental shelf and exclusive economic zone have seriously threatened peace, stability, maritime security and safety, and freedom of navigation," said Dung.
During anti-Chinese riots last week hundreds of factories were damaged or destroyed.
At least three Chinese workers were killed and more than 100 injured. While the rioting was triggered by anger at China, most of the factories looted, vandalized or set alight were not Chinese. Companies from around the world were affected, with Taiwanese firms especially badly hit.
In response, the Vietnamese government offered tax breaks to damaged factories.
A government statement late Wednesday said businesses hit by the riots would be entitled to a reduction of up to 30 percent in a special consumption tax and reduced import and export tariffs. Rents will also be reduced or waived for companies with damaged factories, the statement said.
The violence had erupted after a US$1 billion deepwater rig owned by China’s state-run CNOOC oil company was parked 240 kilometres off the coast of Vietnam.
Hanoi says the rig is in its 200-nautical-mile exclusive economic zone and on its continental shelf. China has said the rig was operating completely within its waters.
The move was the latest in a series of confrontations between China and some of its neighbours.
Washington has responded with sharpened rhetoric towards Beijing, describing a pattern of "provocative" actions by China.
On Wednesday, Dung said Vietnam and the Philippines were determined to oppose Chinese infringement of their territorial waters, calling on the world to condemn China’s actions in a rare public show of unity against Beijing.
Manila is seeking a ruling from the Permanent Court of Arbitration to confirm its right to exploit the waters in its exclusive economic zone as allowed under the U.N. Convention on the Law of the Sea (Unclos).
A ruling against China could prompt other claimants to challenge Beijing, experts have said. But any ruling would effectively be unenforceable because there is no body under Unclos to police such decisions, legal experts said.
China claims about 90 per cent of the South China Sea, displaying its reach on official maps with a so-called nine-dash line that stretches deep into the maritime heart of Southeast Asia.
The Philippines, Vietnam, Malaysia, Brunei and Taiwan also have claims to parts of the potentially energy-rich waters.
The spat between Vietnam and China is the worst breakdown in shaky but important ties between the two Communist states since a brief but bloody border war in 1979.