The Foreign Ministry on Tuesday denied a Japanese media report that Seoul and Tokyo are discussing the creation of an economic cooperation fund to resolve a dispute over compensation for Japan's wartime forced labor.

Japan's Kyodo News agency reported earlier on Monday that the South Korean and Japanese governments have begun discussing ways to resolve the nearly year-long dispute, with the fund being considered as a possible option.

According to the report, the envisioned financial resource may involve the South Korean government as well as South Korean and Japanese companies.

The fund will reportedly be run under the designation of "economic cooperation" rather than "compensation" for forced labor victims, and Tokyo does not intend to contribute government funds in line with its position that all colonial-era grievance claims were settled in the 1965 normalization treaty.

The Foreign Ministry, however, said that no such plans have been discussed during talks between the two nations.

A ministry official said that the South Korean government respects the top court's ruling on the forced labor issue and is seeking reasonable measures acceptable to the victims as well as the South Korean and Japanese public.