The situation in the Taiwan Strait is tense - we cancelled the exercises to avoid misunderstanding

Taiwan Defence Ministry official

A Taiwanese military official said the naval exercises planned for next week had been called off to avoid what he described as future misunderstandings.

The Chinese Government is angry about comments made over the weekend by Taiwanese President Chen Shui-bian who suggested that, in reality, Taiwan and China were already separate countries.

Taiwanese officials said the submarine-hunting exercise codenamed "Sea Shark" was a routine drill but too much could have been read into it on both sides of the Taiwan Strait.

A Defence Ministry spokesman said: "The situation in the Taiwan Strait is tense. We cancelled the exercises to avoid misunderstanding."

Beijing reaction

Beijing appeared outraged at President Chen's remarks that a referendum on Taiwanese independence could be called.

Though Mr Chen and his officials later sought to stress that nothing had changed in Taiwan's policy, tension remains high between China and Taiwan - which Beijing regards as a renegade province.

	1949: Chinese Nationalists flee to Taiwan as People's Republic of China declared 1979: China-US diplomatic ties established after Washington switches recognition from Taipei 2000: Chen Shui-bian elected Taiwan president. Beijing threatens to attack if island attempts to secede 2001: Taipei lifts ban on direct trade and investment with China 2002: Taiwan warns China is boosting military spending and losing patience over peaceful reunification Q&A: Taiwan's relations with China

One of Beijing's state-run newspapers on Wednesday quoted an unnamed "senior military source" as saying there was a growing possibility that "peace would have to be safeguarded and won through the use of force".

The "military source" in the China Daily stressed that Beijing preferred peaceful solutions, but said it was open to other options if necessary.

"Taiwan choosing independence is tantamount to choosing war," the source said.

"We must not delude ourselves that the separatists will abandon their pro-independence pursuit overnight.

"If we want to strive for peace, we have to be fully prepared for military actions."

The article quoted the source as saying that Mr Chen's comments "underscore the need for the mainland to proceed with military preparations as a backup to encourage a peaceful reunification".

"The resolution to the Taiwan question cannot be postponed indefinitely. We have enough confidence and determination to settle the question."

But Taiwan continues to insist Mr Chen's weekend remarks have been misunderstood.

If we want to strive for peace, we have to be fully prepared for military actions

China Daily

"My comments were oversimplified and may have caused misunderstanding," Chang Chun-hsiung, secretary-general of President Chen's Democratic Progressive Party (DPP), quoted Mr Chen as saying at the conclusion of a meeting of party leaders.

In Taiwan, opinion polls provided a mixed picture. One poll suggested support for Mr Chen's backing of a referendum, another suggested the incident had dented his popularity.