Memoirs of a Geisha, the Hollywood blockbuster about the life and loves of a Japanese courtesan with Chinese actresses in the lead roles, has fallen victim to Sino-Japanese tensions and been banned in China by high-ranking officials.

Geisha was given the seal of approval from China's powerful film regulator Sarft (State Administration of Radio, Film and Television) and distributors had been awaiting a release date.

But sources in the film business say the decision to ban Rob Marshall's film came from higher up in the government. They say senior officials fear the sight of some of China's most beloved actors - Gong Li and Zhang Ziyi, as well as the Hong Kong star Michelle Yeoh - playing Japanese courtesans could prove inflammatory.

Ties between the two neighbours hit a post-war low in April last year when thousands of Chinese took to the streets to protest against Japan's wartime aggression, and tension has not relaxed much since. China believes Japan has not atoned enough for its invasion and brutal occupation from 1937 to 1945.

For weeks, the Chinese media has been filled with speculation about when, or if, Geisha would open in China. The tentative release date given was 10 February, but it seems the film, adapted from Arthur Golden's best-selling novel about the life of a geisha in Tokyo in the years around the Second World War, has touched a nerve. And now, as a result, it will not be shown in Chinese cinemas.

Several scenes have proved controversial, including one where the main geisha character, played by the House of Flying Daggers star, Zhang, "sells" her virginity to a group of men.

The film, to be distributed in China by Columbia Tristar, had even entered the dubbing process, normally the final step before release. After premiering in the United States in December, it was set for a gala opening in Beijing on 9 January. But haggling between the producers and the censor delayed the opening date. Censors subsequently passed Geisha for viewing but still no date for a premiere had been fixed and the movie opened instead in Hong Kong on 12 January.

The Chinese government is keen to keep a tight grip on public morals, and Sarft limits the number of foreign films allowed in China to about 20 a year.

Expectations were high in China about Geisha, which was the first Hollywood mega-movie to star Asian actors in all the main roles. The film is widely available in pirate DVD shops, including top-quality copies of screen versions made available to members of the Academy which votes for the Oscars.

Relations between China and Japan are complicated at the best of times. Ties have remained tense since last year, when Japan approved the publication of a history textbook that the Chinese believe minimises atrocities committed during the occupation of China, including the Rape of Nanjing from December 1937 till February 1938, when 100,000 Chinese were said to have been massacred.

The Chinese are also angry at the regular visits the Japanese Prime Minister, Junichiro Koizumi, pays to Tokyo's Yasukuni shrine, where war criminals are buried alongside the war dead and which China sees as a potent symbol of Japan's past militarism.

The reaction to the idea of Chinese actresses playing Japanese roles has been a mixture of pride and horror. Some bloggers have expressed delight that such high-profile roles in a major international film should have been given to Chinese movie stars.

The fact that no Japanese actors had a big enough reputation to merit casting in the film was taken as a compliment to China's growing power in the film business.

But others have expressed outrage at the prospect of Chinese women playing geishas, saying China's most fragrant actresses should not be playing "Japanese prostitutes".