Japan's largest "yakuza" crime syndicate has cancelled its annual Halloween trick-or-treat event with a grovelling apology to children hoping to score a fistful of candies.

A recent high-profile split of the powerful Yamaguchi-gumi is behind the cancellation, with mobsters fearing that a gang conflict could put their pint-sized guests at risk, yakuza experts said on Thursday.

The group from the western city of Kobe traditionally holds a variety of community events, including a rice cake-making festival, and have previously invited neighbourhood children to Halloween parties, where they hand out bags of sweets.

However, a notice posted on their office gate explained that the heavily tattooed gangsters would pull the plug on this year's trick-or-treating, the Sankei newspaper reported, without clarifying why.

"The Halloween event that has taken place annually on October 31 will be cancelled this year due to various reasons," the notice read.

"We regret disappointing parents and children looking forward to the event, but we promise to resume it next year."

Like the Italian Mafia and Chinese triads, the yakuza engage in everything from gambling, drugs and prostitution to loan sharking, protection rackets and white-collar crime.

But unlike their foreign counterparts, they are not illegal and each of the designated groups have their own headquarters.

The Yamaguchi-gumi was rocked by internal strife last month following the defection of several top leaders who formed their own splinter group.

The split prompted police warnings of a possible repeat of a 1980s gangland bloodbath, with a series of raids and arrests made since.

A photo apparently taken last year was posted on Twitter, showing yakuza members setting tables in the group's garage, where they had colourfully decorated bags of sweets ready for children in fancy dress.

"The Yamaguchi-gumi has split and is in tense relations with the (splinter) group," Atsushi Mizoguchi, a freelance writer and expert on the clandestine world, told AFP.

"If they gather the neighbourhood children and an incident occurs, the boss would be pursued for responsibility."

Japan's yakuza used to host a variety of community events, such as summer festivals, but has been forced to scale down such activities because of decreasing social tolerance for mobsters, added Mizoguchi.

Tomohiko Suzuki, another freelance writer who covers organised crime, said he was at last year's trick-or-treat event organised by the Yamaguchi-gumi.

"There was almost no media attention last year," he said. "But it would create havoc this year."