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By Stuart Grudgings and Manuel Mogato
BANDAR SERI BEGAWAN (Reuters) - China agreed to hold formal talks with Southeast Asian nations on a plan to ease maritime tensions on Sunday as the Philippines accused it of causing "increasing militarization" of the South China Sea, one of Asia's naval flashpoints.
The rebuke by Philippine Foreign Minister Albert del Rosario at a regional summit in Brunei came a day after China's state media warned of an inevitable "counterstrike" against the Philippines if it continued to provoke Beijing.
Friction between China and the Philippines over disputed territories has surged since last year due to several naval stand-offs as China asserts its vast claims over the oil and gas rich sea.
The heated rhetoric came as both China and the 10-member Association of Southeast Asian Nations (ASEAN) claimed progress in efforts to agree a mechanism aimed at defusing naval tensions.
China agreed to hold "official consultations" on a proposed Code of Conduct (CoC) governing naval actions at a meeting with ASEAN in China in September, a step that Thailand's foreign minister hailed as "very significant".
The two sides had already agreed to hold the foreign ministers' meeting, which will follow a special ASEAN ministers' gathering on the South China Sea issue in Thailand in August.
"We agreed to maritime cooperation to make our surrounding sea a sea of peace, friendship and cooperation," Chinese Foreign Minister Wang Yi told reporters in Brunei.
But Wang stressed that any progress on agreeing the new framework would be dependent on countries following a confidence-building "declaration of conduct" agreed in 2002 which it accuses the Philippines of violating.
"Both China and other coastal states in the South China Sea are making efforts for a stable South China Sea. I believe any activity taken by individual claimant countries to go against the trend will not enjoy the support of the majority of countries and will not succeed either."
"MASSIVE" PRESENCE CONDEMNED
In the latest stand-off, the Philippines accused China of encroaching on its territory after three Chinese ships converged just 5 nautical miles from a small reef where the Philippines maintains a small military force.
This month the Philippines moved more troops and supplies to the reef, which is within its 200-nautical mile economic exclusion zone. China, which does not recognize the zone, condemned it as an "illegal occupation".
Del Rosario said the "massive" presence of Chinese military and paramilitary ships at the Second Thomas shoal and at another reef called the Scarborough Shoal - the site of a tense standoff last year - was a threat to regional peace.
"The statement on counterstrike is an irresponsible one. We condemn any threats of use of force," Del Rosario told reporters following a meeting of ASEAN foreign ministers.
He said the ministers had discussed China's ongoing "illegal" occupation of the Scarborough Shoal, which is just 124 nautical miles of the Philippine coast.
The worsening dispute comes as Philippine-ally the United States, which says it has a national interest in freedom of navigation in the South China Sea, shifts its military attention back to Asia. Secretary of State John Kerry is due to arrive in Brunei on Monday to join the regional summit.
Critics say China is intent on cementing its claims over the sea through its superior and growing naval might, and has little interest in rushing to agree a code of conduct with ASEAN nations, four of which have competing claims.
Divisions among ASEAN over the maritime dispute burst into the open a year ago when a summit chaired by Chinese ally Cambodia failed to issue a closing communiqué for the first time in the group's 45-year history.
(Additional reporting by Megha Rajagopalan; Editing by Jeremy Laurence)