By Damian Grammaticas BBC correspondent in Hong Kong

Taiwan's president has said he may allow private groups to hold direct negotiations with China about opening trade and transport links.

If President Chen Shui-bian allows organisations like airlines and shipping companies to negotiate with Beijing it would amount to a significant change of policy.

Almost all links between Taiwan and mainland China have been frozen since 1949.

Taiwanese airlines and shipping companies are hungry to do business with China

President Chen Shui-bian said his cabinet has almost reached a consensus that the government, in his words, "doesn't have to be in the front line for everything".

"With the government's guidance, we can authorise the public sector to assist us," he said, indicating that private organisations may be allowed to negotiate on the government's behalf.

Security versus economy

One of Taiwan's priorities is to open direct air and sea links with mainland China. They were banned more than five decades ago to protect the island from a Chinese invasion.

Other countries are also eager to gain access to China's huge market

Now it is accepted that the ban doesn't so much give the island security as harm its economy.

Taiwanese airlines and shipping companies are hungry to do business with China.

They would save costs by being able to travel direct to the Chinese mainland, instead of through transit ports such as Hong Kong.

They would also be able to compete for new business in China's huge market.

Non-political

Letting these companies negotiate the opening of transport links may allow Taiwan to skirt the political differences that have led to the breakdown of government-to-government talks.

There are still differences in President Chen's government, particularly over how to find a balance between security and trade.

Doing business direct would save shipping companies money

There are also fears that Beijing may press its political agenda while negotiating with private companies.

So President Chen said his only concern was that the island's government is not in any way "downgraded, localised or marginalised" in any talks.

Same claim

Earlier in the week, President Chen said he would send a high-level delegation to Beijing later this year to try to re-open formal contact between the governments.

China's Xinhua agency has quoted an unnamed official in Beijing's Taiwan Affairs Office, welcoming "any practical and sincere proposal aimed at improving relations across the Taiwan Straits".

But he reiterated the old political demands, saying before any delegation would be welcome President Chen's party must accept Beijing's territorial claim over Taiwan and its 23 million people.