China has officially responded to Taiwan's passing of a referendum bill, saying it raised "grave concerns".
The opposition placed heavy restrictions on the bill
The statement from China's Taiwan Affairs Office suggested relief the bill ended up being watered down.
The new law allows the president to poll the island on independence in the event of an external attack.
But it was substantially weakened from the government's draft and ruled out a vote on sovereignty issues in any other circumstance.
In recognition of this, the China Daily newspaper praised "rational" forces in Taiwan, which Beijing views as a renegade province which it eventually aims to reclaim.
It has threatened to act if Taiwan makes any moves towards independence.
The BBC's Louisa Lim, reporting from Beijing, says China's worst-case scenario has not been realised.
Beijing had feared that if a mechanism for referendums was established, it could be used to force a vote on independence.
But Taiwan's opposition coalition pushed through a clause that blocks referendums on the most sensitive subjects, including sovereignty and changing Taiwan's name.
"That suggests there exists still a rational force on the island that opposes radical moves to undermine cross-Straits ties by promoting independence referendums,'' the state-backed China Daily newspaper quoted Liu Guoshen - director of the Taiwan Research Institute at Xiamen University in East China's Fujian Province - as saying.
But the paper also cautioned the vote "handed a time bomb to some separatist forces".
Chen has made referendums a key election issue
The move was "extremely irresponsible", the paper also quoted Wang Kebin, secretary-general of the China Council for the Promotion of Peaceful National Reunification, as saying.
"Some articles of the bill still leave room for the pro-independence forces in Taiwan to conduct separatist activities and will be the hidden trouble hindering the reunification of the Chinese nation," Xinhua said.
Other papers trumpeted the personal failure of Taiwanese President Chen Shui-bian to push the bill through.
"Independence referendum of Chen Shui-bian fails," ran the headline of the Global Times.
"For the team of Chen Shui-bian, this is a great defeat. But the proposal of defensive referendum has been voted and this will cause an inestimable impact on cross-Straits relations," the article said.
MPs in Taipei considered several different versions of the referendum bill.
The version that was passed, written by the opposition which has a parliamentary majority, gives the legislature the power to screen potential referendum issues that might involve changes to the constitution.
The opposition was also successful in passing an article that said only the public and parliament could initiate a referendum.
President Chen Shui-bian had wanted the government to also have the power to call such a vote.
Eyes on election
Opinion polls suggest that the majority of Taiwanese people prefer the ambiguous status quo of their island.
The BBC's Chris Hogg says the referendum issue used to be a taboo subject in Taiwanese politics. Fears that it would provoke China to use force stifled serious debate.
But, he says, politicians on all sides seem to have decided they can now use it to drum up support ahead of presidential elections next March.
President Chen has made referendums a key issue in his campaign for re-election as leader.
The KMT still wants reunification with China
His cabinet was also keen to stage referendums on issues such as nuclear power and membership of the World Health Organisation during next year's presidential vote.