Activist group Sea Shepherd is abandoning its annual face-off with Japanese whaling ships in Antarctic waters, saying it has little chance of success against Japan's economic and military might.

The end of the 12-year campaign means Japan will continue its so-called "scientific" whaling program without the group trying to physically prevent the annual slaughter, which takes place despite loud international protest.

Japan reportedly intends to take about 4000 whales over the next 12 years in the name of "research", and ultimately plans to resume commercial whaling.

In a statement, Sea Shepherd founder Captain Paul Watson said Japan had doubled its hunting grounds in the Southern Ocean and reduced its annual whale-kill quota to 333, giving its fleet "more time and more area to kill".

He said Japan was also using "military" tactics in the form of real-time satellite surveillance to track Sea Shepherd ship movements, "and if they know where our ships are at any given moment, they can easily avoid us ??? we cannot compete with their military grade technology".

"The decision we have had to face is: do we spend our limited resources on another campaign to the Southern Ocean that will have little chance of a successful intervention or do we regroup with different strategies and tactics?

"If something is not working the only recourse is to look for a better plan," he wrote.

Mr Watson said Japanese whalers were backed by resources and subsidies from their government, while Sea Shepherd was "limited in resources and we have hostile governments against us in Australia, New Zealand and the United States."

Mr Watson pointed to Australia's refusal to allow the group charitable tax-deduction status, hampering its ability to raise funds.

He said the group was "not abandoning the Southern Ocean whale sanctuary ... we need to cultivate the resources, the tactics and the ability to significantly shut down the illegal whaling operations of the Japanese whaling fleet".

Mr Watson said Sea Shepherd was "in the Southern Ocean doing what the Australian government has the responsibility to do but has refused to do". He called on the Turnbull government to uphold international and Australian law in relation to whaling.

Sea Shepherd's confrontations with the Japanese whaling fleet brought international attention to the cause, and elevated the profile of the not-for-profit group which campaigns to protect the world's oceans.

Sea Shepherd says it saved more than 6000 whales during its Southern Ocean campaign, which began in 2005.

In January this year, Japan was caught killing a whale deep inside Antarctic waters declared by Australia to be a protected whale sanctuary. Sea Shepherd activists captured the first images of Japan hunting whales in the Southern Ocean since Tokyo defied an international court ruling that declared the hunt to be illegal.

In response, Australia said it was "deeply disappointed" that Japan had continued its hunt, just days after Prime Minister Malcolm Turnbull had discussed it with Japanese Prime Minister Shinzo Abe. The Turnbull government had previously backed an international resolution to condemn Tokyo's slaughter of whales.

Japan has refused to recognise the sanctuary and claims the whaling is for scientific research - yet also allows the sale of the whale flesh in markets and restaurants.

A global moratorium on commercial whaling dates back to the 1980s but a loophole remained for countries to kill whales in the name of "scientific research". Japan is the only country to conduct whaling outside its territorial waters.

The Japanese embassy in Canberra has previously said that Sea Shepherd's activities constitute "sabotage" and were "not acceptable as they threaten our research ships and the lives and safety of their crew".