Mr Chen has apologised for the scandal but maintains his innocence

The Kuomintang party is planning to table a motion in parliament which, if successful, will force a public vote on whether to recall the president.

Mr Chen has faced crises before, but after prosecutors said on Friday they had evidence to charge him with graft, he faces his toughest challenge yet.

In a televised speech on Sunday, the president proclaimed his innocence.

"I must ask everyone, could A-Bian be this kind of crooked fellow?" he said, referring to himself by his nickname.

Mr Chen cannot be prosecuted while in office as he is protected by presidential immunity, but his wife and three ex-aides were charged with the misuse of state funds.

He has lost the people's trust and respect Ma Ying-jeou Opposition Nationalist Party Taiwanese give their reaction

In his speech, Mr Chen promised to resign if his wife was convicted, but he again refuted the prosecutors' claims on Friday that he and his family embezzled 14.8m Taiwan dollars (US$450,000).

The address failed to calm investors. The island's stock market fell 1.7% when trading began on Monday.

Third attempt

The main opposition Kuomintang party will formally propose the recall motion in parliament on Friday, according to spokesman Tsai Chin-lung.

"We sincerely urge our colleagues from the ruling party and other groups to support our move," he said.

If it passes, the recall motion will trigger a national referendum on whether to get rid of the president.

But the opposition parties, which have a small majority in parliament, will need at least 14 ruling party members to back the motion in order for it to succeed.

SCANDAL TIMELINE March 2004: President Chen narrowly wins re-election May 2006: President's son-in-law held over insider trading claims. Charged in July Allegations of improper conduct involving Chen's wife and senior aides also surface June: Chen cedes some powers to PM amid outcry Unprecedented opposition motion to oust him, which fails September: Two weeks of pro and anti-Chen marches Opposition launch new bid to recall Chen. Again fails October: Wu Shu-chen cleared of accepting shop vouchers in return for influence November: Wu Shu-chen charged with corruption over handling of secret presidential funds Prosecutors say enough evidence to indict Chen, but he is protected by presidential immunity Testing times

The last two attempts - in June and October - failed as all Mr Chen's Democratic Progressive Party (DPP) colleagues stood by him.

Analysts say the big question now is whether the prosecutors' conclusions last Friday will cause some DPP lawmakers to lose faith in their leader and vote in favour of the recall motion.

Already some ruling party members are asking Mr Chen to take a look at his position.

"I suggest the president take time off and concentrate on the trial until a verdict is announced," said one lawmaker, Cheng Yun-peng.

DPP Chairman Yu Shyi-kun told the Associated Press that the party would meet on Wednesday to discuss the current situation.

'Unacceptable'

In his long-awaited TV address on Sunday, Mr Chen told supporters that the charges against him were "unacceptable".

Protesters have taken to the streets to call for his resignation

"The indictment is nothing but a death sentence to politicians," he said.

Mr Chen said he "decided to face the prosecutors' questioning and investigation because I had nothing to hide", and that he was "willing to resign if the judge convicts me of corruption".

But he said he had no motive for corruption, and pointed out that he had voluntarily halved his own presidential salary - funds which were far larger than the amount of money allegedly embezzled.

The TV address is being regarded as one of the most important speeches in President Chen's political career, according to the BBC's Caroline Gluck in Taipei.