South Korea has warned Japan that its claim to a group of disputed islands "seriously hurts" ties.
The row has fuelled anti-Japanese passions in South Korea
Unification Minister Chung Dong-young vowed to defend South Korea's sovereignty and said Japan was trying to justify its colonial past.
The row was fired by a Japanese local assembly's vote on Wednesday to give the islands, called Takeshima in Japan and Dokdo in Korean, a special day.
With tensions high, Japan said it flew a spy plane in the area on Wednesday.
The flight, which took place just hours after Japan's Shimane prefectural assembly voted for a symbolic "Takeshima Day", came within 10 miles (16km) of the islands.
South Korea's Yonhap news agency said the flight turned back after warnings from the South Korean air force.
Known as Dokdo (Solitary islands) in Korea, Takeshima (Bamboo islands) in Japan
Also known as Liancourt rocks
Claimed by Japan and South Korea, but occupied by S Korea since 1953
Just 230,000 sq m in size, with no fresh water
But surrounding waters valuable for their fishing
Mr Chung, who is also leader of South Korea's National Security Council, read a strongly-worded and nationally televised statement regarding the Japanese claim.
"This is not just an issue of territorial rights but an action tantamount to denying the history of Korea's liberation and justifying Japan's past invasion of Korea," he said.
The dispute over the rocky and uninhabited islands, which are seen to have economic and strategic value, has been simmering for years.
Japan dates its modern claim to 1905, the same year that Japan's forces seized control of the Korean peninsula.
But South Korea has occupied the islands since 1953, and they are currently patrolled by a detachment of South Korean police.
The flare up in the row has soured improving ties between the two nations during a year in which they are meant to be celebrating 40 years of diplomatic ties, following Japan's 1910-1945 colonisation.
The BBC's correspondent in Seoul, Charles Scanlon, says latent anti-Japanese feelings have boiled to the surface. Demonstrators have burned Japanese flags and pictures of Prime Minister Junichiro Koizumi.
The South Korean government has announced it is easing restrictions on visiting the islands. Visits had previously been limited to a few dozen people a day, because, the government said, its sea birds needed protection.