Beijing has signalled strong opposition to Taipei's passage of a referendum law that finally creates a legal basis for future plebiscite on independence.

Although the bill falls short of allowing the Taiwan authorities to easily call an independence vote, it does give the island leader the power to hold an independence referendum in case of an "external threat.''

"We firmly oppose anybody who attempts to engage in separatist activities through referendum legislation,'' the Taiwan Affairs Office of the State Council said in a written statement on Friday.

"We will absolutely not allow anyone to try to split Taiwan from China.''

The office said the mainland has been deeply concerned over the referendum legislation and will continue to keep a close watch on developments.

The new comments from the top government body in charge of cross-Straits ties contrasted with its earlier pledge to respond with tougher action if Taiwan passed "a referendum law without restrictions.''

On Thursday, the "legislative yuan,'' the island's top legislature, rejected a radical version of the referendum bill proposed by Taiwan leader Chen Shui-bian's pro-independence Democratic Progressive Party.

Controlled by the opposition coalition, the "legislative yuan" managed to exclude the issues of sovereignty, territory and a proposed new constitution from the referendum process.

Lawmakers also dropped the most controversial part of the legislation -- a clause which explicitly states a referendum can be held on independence or on changing the island's name or flag, which Beijing says may trigger war.

The bill, however, has a clause offering the Taiwan leader the power to initiate a "defensive referendum'' on the island's sovereignty in the event of external threats to its security.

The "defensive referendum'' clause, which spells out the possibility of a future independence vote, prompted the Taiwan Affair Office to reiterate Beijing's long-standing one-China principle.

It states there is only one China, Taiwan is an inseparable part of Chinese territory and China's sovereignty and territorial integrity allows no separation.

Although Taipei avoided a showdown with the mainland ahead of the island's March 2004 "presidential'' elections, mainland experts on Taiwan studies expressed deep concern over the approval of the new law.

Xu Shiquan, vice-chairman of the National Society of Taiwan Studies, said passing such a bill is bad news for cross-Straits relations.

"By legally paving the way for a future independence referendum, the bill may create more uncertainties and even crises in bilateral ties,'' the researcher told China Daily.

"It has led the die-hard separatist forces a step forward on the road of creeping independence and will impose a negative impact on the development of relations between Taiwan and the mainland."

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