Japan has expressed concern, as have the US and Australia.

It is thought that the Chinese used a ground-based medium-range ballistic missile to destroy a weather satellite that had been launched in 1999.

Correspondents say this is the first known satellite intercept test for more than 20 years. China's foreign ministry refused to confirm or deny the report.

While the technology is not new, it does underline the growing capabilities of China's armed forces, according to the BBC's Dan Griffiths in Beijing.

Space arms race?

Late on Thursday, US National Security Council spokesman Gordon Johndroe confirmed an article in the magazine American Aviation Week and Space Technology, which reported that the test had taken place.

"What we don't want to see is some sort of spread, if you like, of an arms race into outer space" Alexander Downer Australian Foreign Minister Test sparks space arms fears

The report said that a Chinese Feng Yun 1C polar orbit weather satellite was destroyed by an anti-satellite system launched from or near China's Xichang Space Centre on 11 January.

The test is thought to have occurred at more than 537 miles (865km) above the Earth.

Foreign ministry spokesman Liu Jianchao said: "I can't say anything about the reports. I really don't know."

But he added: "China advocates the peaceful use of space and opposes the weaponisation of space, and also opposes any form of arms race."

Japanese Prime Minister Shinzo Abe said he had asked China for an explanation and said nations "must use space peacefully".

Japanese Foreign Minister Taro Aso said Beijing should have given Tokyo advance notice.

Mr Johndroe said the US "believes China's development and testing of such weapons is inconsistent with the spirit of co-operation that both countries aspire to in the civil space area".

Australian Foreign Minister Alexander Downer said Australia did not want to see "some sort of spread, if you like, of an arms race into outer space".

There are already growing international concerns about China's rising military power.

While Beijing keeps its defence spending a closely-guarded secret, analysts suggest that it has grown rapidly in recent years.

Space debris

The test, if confirmed, would mean that China could now theoretically shoot down spy satellites operated by other nations.

It would be the first such test since the 1980s, when both the US and the Soviet Union destroyed satellites in space.

These tests were halted over concerns that the debris they produced could harm civilian and military satellite operations.

The same concerns have been raised about this latest reported test.

American Aviation Week and Space Technology said the move could have left "considerable space debris in an orbit used by many different satellites".

While the US may be unhappy about China's actions, the Washington administration has recently opposed international calls to end such tests.

It revised US space policy last October to state that Washington had the right to freedom of action in space, and the US is known to be researching such "satellite-killing" weapons itself.
 

Last week, according to US officials, China managed to destroy one of its own ageing weather satellites using a medium-range ballistic missile.

The satellite was some 500 miles (800km) above the earth.

At the very least, it represents the first significant escalation in the space weapons race in 20 years.

Only the United States and the former Soviet Union have previously destroyed targets in space and that was back in the 1980s.

Although this time China used a relatively old-fashioned ballistic missile to target the satellite, it is also thought to be working on far more sophisticated laser technology to do the job.

US officials have been alarmed by the test itself and the failure of China to announce what it was doing either publicly or privately.

A White House spokesman said the "development and testing of such weapons is inconsistent with the spirit of co-operation that both countries aspire to in the civil space area".

He said both the US and other countries were concerned.

Arms build-up

Set alongside the recent dramatic increase in China's defence spending and the modernisation of its nuclear weapons and navy, to US officials the space test is one more worrying sign of Beijing's military ambitions.

The Pentagon recently warned in a report to Congress that China's military "is in the process of long-term transformation from a mass army designed for protracted wars of attrition on its territory to a more modern force capable of fighting short-duration, high-intensity conflicts against high-tech adversaries".

The report also noted that "China's military expansion is already such as to alter regional military balances. Long-term trends in China's strategic nuclear forces modernisation, land and sea-based access denial capabilities, and emerging precision-strike weapons have the potential to pose credible threats to modern militaries operating in the region".

And although tiny in comparison with US military budgets, Washington estimates China is spending $80bn (£40bn, 60bn euros) on defence, more than three times the official figure given by Beijing.

But why is the US so worried about anti-satellite weapons in particular?

Put simply the US military relies heavily on satellites to see and hear potential enemies and for its own communications.

So if China does indeed now have the ability to knock out targets in space, those capabilities are now under threat.

US research

But on the issue of space weapons, the US certainly risks the charge of hypocrisy.

The US has also been carrying out research on lasers that could knock out enemy satellites and the Bush administration has repeatedly ruled out the idea of a global treaty banning putting weapons in space.

Only last August, President Bush laid out a new US national space policy which said Washington would "preserve its rights, capabilities and freedom of action in space" and "dissuade or deter others from either impeding those rights or developing capabilities intended to do so".

It also threatened to "deny, if necessary, adversaries the use of space capabilities hostile to US national interests".

To some extent the announcement of that policy was clearly a response to a perceived threat from China as well as an attempt to preserve the current US advantage in space.

It may be that last week's test is an attempt by China to push back at the US and put pressure on Washington to consider negotiating a treaty to ban weapons in space.