An international tribune has ruled in favour of the Philippines and against China in a dispute over rights to tiny islands in the South China Sea.

The Permanent Court of Arbitration in the Hague declared China has no historic right to the Spratly Islands and Scarborough Shoal, a series of coral reefs where the Asian giant has been asserting claims since 1947.

The tribunal declared large areas of the South China Sea to be neutral international waters and China could not lay claim to “sea areas...within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China.”

It also found that China had violated the Philippines’ sovereign rights, particularly to fishing and oil exploration in the areas, and “unlawfully created a serious risk of collision when they physically obstructed Philippine vessels”.

China’s construction of artificial islands in the Spratly Islands was also criticised for causing “severe harm to the coral reef environment”.

China responded angrily, describing the verdict as “ill-founded” and null and void.

Its defence ministry said it would “unswervingly safeguard state sovereignty, security [and] maritime rights”.

The decision is likely to increase tensions in an area believed to hold significant oil and gas reserves and that is a route for up to $5 trillion in maritime trade.

Both China and the US have held military drills in the South China Sea recently.