China's Ministry of Foreign Affairs has lodged an official complaint to Japan after a politician claimed the Nanjing Massacre never occurred.
Nanjing has also suspended ties with its sister city Nagoya, whose mayor Takashi Kawamura made the remark.
According to the Asahi Shimbun paper, he said: "While there was general combat, I do not believe there was anything like the Nanking Incident."
Up to 300,000 people were killed in the massacre in the winter of 1937-1938.
The atrocity remains a sore point between the two countries. This year marks the 40th anniversary since they resumed diplomatic relations.
Mr Kawamura's comment was made to a delegation visiting Nagoya from Nanjing.
He said that his father had been stationed in Nanjing in 1945, and had been treated well by the Chinese residents.
Asahi reported that Mr Kawamura made similar comments in a meeting in September 2009.
Relations between China and Japan have been turbulent since the end of World War II, when Japanese occupation of parts of China came to an end.
The Nanjing Massacre has remained a sticking point in relations, along with land disputes and war reparations.
The number of people killed in the incident varies depending on the source, and has been put at anywhere up to 300,000.