"Taiwan will by no means be provocative towards the Chinese communists," Chen said while meeting with visiting US Congressman Scott McInnis.

"But in the face of the belligerent Chinese communists who have refused to renounce their use of force against Taiwan ... Taiwan has to step up its defense capabilities."

Beijing, which regards Taiwan as part of its territory, has repeatedly threatened to invade should the island declare formal independence.

"This is not a result of US pressure," he said as a Taiwan parliamentary delegation wrapped up a fact-finding trip to the United States over the arms deals.

Taiwan's cabinet on June 2 approved a special budget of 610 billion Taiwan dollars (18.2 billion US) to buy advanced weaponry amid tensions with China.

The draft budget, pending parliament's final approval, calls for the purchase of eight submarines, a modified version of the Patriot anti-missile system PAC-III and a fleet of anti-submarine aircraft over a 15-year period beginning 2005.

But some critics have said Taiwan cannot afford the massive spending spree, while others say the new weaponry will not be delivered in time to help the island fend off an attack from China in coming years.

The planned submarine purchase has been at the centre of the controversy because US submarines would cost up to four times more than those on the international arms market.

Parliamentary speaker Wang Jin-pyng, the head of the delegation which visited the United States, said the defense ministry had asked Washington to quote new prices.

"Particularly the quotation for the submarine fleet is way too expensive," Wang told reporters.

Lawmaker Lee Wen-chung from Chen's Democratic Progressive Party said he estimated that the cost of the submarine fleet could be slashed by at least 100 billion Taiwan dollars if all of the ships were built in the United States.

The current plan requires that two submarines be built by Taiwan's state-run China Shipbuilding Corp (CSBC), significantly raising costs.

US President George W. Bush offered the weapons sales in April 2001 as part of the most comprehensive arms package to the island since 1992.

The submarine deal, however, has progressed slowly as the United States has not built conventional submarines for more than 40 years.

Germany and Spain have reportedly declined to offer their designs for fear of offending China.

The United States remains the leading arms supplier to Taiwan despite its shift of diplomatic recognition from Taipei to Beijing in 1979.

WAR.WIRE