PERTH: Japan's foreign minister Sunday described Australia's threat of legal action against its controversial whaling activities as "unfortunate" but said he did not believe it would hurt ties.

"It's very unfortunate the Australian side has indicated it will take action in an international court," Katsuya Okada told reporters on the second and final day of a visit to Australia.

"Should court action become a reality, then Japan will seek to represent its case to the IWC (International Whaling Commission) supporting the fact that its activities are legal and within the convention."

Okada, the first official from the new Japanese government to visit Australia, said however that the dispute should not affect relations between the two major trading partners.

Prime Minister Kevin Rudd on Friday bluntly warned Japan that it had until November to reduce its whale catch to zero, or face action in the International Court of Justice.

Australia, along with New Zealand, has consistently opposed Japan's killing of hundreds of whales each year, which it carries out via a loophole in an international moratorium that allows "lethal research".

Foreign Minister Stephen Smith said Australia remained hopeful of a diplomatic solution but he reiterated Rudd's vow that Canberra would seek redress in the ICJ if talks failed.

"It's quite clear that we have a disagreement on whaling," Smith said after meeting Okada in the Western Australian capital of Perth.

"I made clear to Foreign Minister Okada in the course of our conversations (that) Australia believes that time is running out," he added.

Smith said Canberra had "in the last week or so" decided to bring a proposal before the IWC that whaling in the Great Southern Oceans be phased out over a reasonable period of time.

The case would be taken to the IWC in the very near future, Smith added, "potentially as early as tomorrow (Monday)."

Okada insisted before leaving Tokyo that Japan's whaling activities were legal, carried out in public waters and in accordance with international conventions.

He and Rudd had a "frank discussion on whaling" during their meeting in Sydney on Saturday.

For the past six years Japanese harpooners have been pursued by militant environmental activists from the Sea Shepherd Conservation Society, and this year clashes have been particularly fierce.

Okada and Smith both condemned the violence, which has seen a Sea Shepherd powerboat sunk, and the detention of one of their activists.

A group of about 10 Sea Shepherd campaigners confronted the pair during an official wreath-laying in Perth's war cemetery, staging a silent protest against the annual whale hunt.

"For the past two years, by its lack of action, the Rudd government has effectively given Japan the green light to ram and sink ships and kill endangered species," a Sea Shepherd spokesman said.

Rudd had previously threatened Japan with legal action, and the spokesman said it was "hard to believe" he was serious this time.

Okada and Smith also discussed free trade, security and nuclear disarmament, issuing a joint statement affirming their close cooperation on non-proliferation, and expressing serious concern over Iran's atomic drive.

The statement also condemned "in the strongest terms" North Korea's latest nuclear test and missile launches last year and said the reclusive state remained a "major threat" to peace and stability in the region and the world "which cannot be tolerated."

Japan is Australia's top export market, with sales worth 55 billion Australian dollars (49 billion US) in the year to June, dominated by coal and other commodities.

Japan is also Australia's third-largest source of imports -- mostly cars and petroleum -- with two-way trade accounting for 15.7 percent of Australia's total trade.