Taiwan opposition parties, which favour closer ties with China and command a slim majority in parliament, want to push through the peace bill that would effectively sideline Chen's government in cross-Strait relations.

Chen, in a meeting with members of his independence-leaning Democratic Progressive Party (DPP) late on Thursday, told DPP lawmakers to block the opposition initiative at all costs.

"If the peace promotion bill passes in its present version, Taiwan is finished. This is a war about life and death for the destiny and future of Taiwan," Chen said.

"It is called peace law on the surface, but it is in fact a surrender law."

China has viewed Taiwan as a rebel province since the end of the civil war in 1949 and insists the island be brought back to the fold, by force if necessary.

With the backing of the Nationalist Party, or Kuomintang, and the People First Party, the bill has made its way on to the parliament agenda but scuffles broke out when the DPP and its allies moved to prevent a vote.

If approved, the bill would set up a peace promotion commission responsible for holding talks with Beijing and codify the "1992 consensus" that had formed the basis for fence-mending talks up to 1999.

The 1992 consensus says there is "one China", though each side has its own interpretation of what that means, and is deeply controversial in Taiwan.

Joseph Wu, chairman of the Mainland Affairs Council, said the opposition bill would serve to legalise Beijing's "one China" policy, making it a "Taiwan version of the anti-secession law".

China's anti-secession law allows the use of "non-peaceful means" against Taiwan if it pushes for a permanent split from the mainland.

While Taiwan's China policy is traditionally set by the president, Chen has been under increasing pressure to reconcile with China after opposition leaders visited Beijing earlier this year to meet Chinese President Hu Jintao.

China refuses to deal with Chen and has sought to marginalise his government by offering Taiwan a slew of economic sweeteners after talks with the opposition.

Members to the new peace commission would be nominated by the parties according to their seating ratio in parliament, ensuring the "peace envoys" would be controlled by the opposition alliance.

Taiwan already has several bodies that handle China relations, including the Mainland Affairs Council and the semi-official Straits Exchange Foundation.

Source: Reuters UK