Japan has created a covert foreign intelligence agency to spy on China and North Korea and to collect information on terrorist attacks, said a media report citing the whistleblower website WikiLeaks.

The agency, which aims to provide confidential information to the Japanese government, is the first such established by the country since World War II, the Sydney Morning Herald said on Monday.

The spy unit is modeled on Western counterparts such as the US Central Intelligence Agency (CIA), the Australian Secret Intelligence Service and the British MI6, the report said.

It has been established under the Japan’s Cabinet Intelligence and Research Office, or Naicho, a top intelligence agency in the country.

Diplomatic concerns made Japan to stay away from establishing espionage networks postwar, largely depending on data interception and other technical methods to gather intelligence data.

Japanese military and naval intelligence, along with the infamous secret police, the Kempeitai, carried out wide spy networks throughout east and south-east Asia up to the end of World War II, the report noted.

A secret report cabled to Washington by the US embassy in Tokyo indicates that the decision to create spy agency was taken by the former Prime Minister Yasuo Fukuda, and his successor, Taro, who headed Liberal Democratic Party government until September 2008.

''The decision has been made to go very slowly with this process as the Japanese realise that they lack knowledge, experience, and assets/officers. A training process for new personnel will be started soon,'' the embassy reported.