The measures were approved during a cabinet meeting before Premier Yu Shyi-kun and his cabinet tendered their resignations, which will allow President Chen Shui-bian to reshuffle the ministerial lineup.

"Our goal is to establish forces which are smaller in size but more powerful in combat capabilities," said defense ministry spokesman Liou Chih-jien.

In order to build more a more professional military, Taiwan planned to cut conscripts' service to one year by 2008, Vice Defense Minister Tsai Ming-hsien told reporters.

Professional soldiers, earning 35,000 Taiwan dollars (1,100 US) a month, were expected to comprise 60 percent of the island's troops in three years, Tsai said.

At present, all men are required to serve in the military for a minimum of 33 months at a monthly salary of 5,500 Taiwan dollars.

Analysts said the armed forces had encountered increasing difficulties in enhancing their defense capabilities as conscripts were unable to become skilled in using hi-tech weaponry before their military service ended.

While slashing its manpower, Taiwan's military has been pressing for an arms build-up capable of fast reaction in case of war.

According to a defense ministry report to parliament, China's army could adopt various strategies if war erupted across the Taiwan Strait, ranging from a naval blockade and massive bombing with ballistic missiles to cyberwar and attacks on Taiwan-controlled offshore islands.

China has repeatedly threatened to invade Taiwan if it declares independence although the two sides split in 1949 at the end of a civil war.

Taiwan's cabinet last year approved a special budget of 610.8 billion Taiwan dollars (18.2 billion US) to purchase advanced weaponry from the united states over a 15-year period starting in 2005.

The shopping list includes eight conventional submarines, long-range early warning radar systems, 12 P-3C submarine-hunting aircraft and Patriot PAC-3 anti-missile systems.

In tandem with the reduction in manpower, Taiwan would reduce the number of troops deployed on its offshore islands, including the Kinmen and Matsu groups off China's southeastern Fujian province, the defense ministry says.