The BBC's Jill McGivering: "Elections are being hailed as a political landmark"

The majority of seats have now been declared and election officials say the Nationalists - known as the Kuomintang (KMT) - are on course to build upon their slim majority in an expanded 225 seat parliament. They have governed the island for more than 50 years.

The ruling party's success is likely to be welcome news for the mainland leadership watching from Beijing. The opposition Democratic Progressive Party (DPP) advocates independence for the island - a move Beijing has said it will never tolerate.

It views Taiwan as a renegade province and has threatened to invade if the government makes moves towards declaring formal independence.

Taipei switches allegiance

There was a high turnout across the island

The KMT have also regained control of the influential post of mayor of Taipei.

Their candidate, Ma Ying-jeou, won by a majority of 78,305 votes, bringing to an end to four years of control by the opposition Democratic Progressive Party (DPP). Tens of thousands of cheering, banner-waving supporters have packed the streets around the KMT's campaign headquarters.

Mr Ma's image as a principled fighter against corruption has won him many admirers - and his youthful good looks have earned him the affectionate nickname of ""Sonny Boy Ma".

He told the crowd: "It's not my personal victory, but a victory for all of Taipei's citizens."

Turnout was high among the island's nearly 15 million eligible voters and officials estimated around 80% of Taipei's voters had cast their ballot.

Mr Ma beat the incumbent Chen Shui-bian, one of the DPP's most popular politicians who is thought to have his sights on the presidential elections due in 2000.

New start

President Lee Teng-hui casts his vote

Conceding defeat Mr Chen said "democracy is about people making a decision, whether in choosing a mayor or deciding the country's future."

But the chairman of the DPP, Lin Yih-hsiung, said the result was a setback for the democratic movement.

"We will learn from this and make a new start," he said.

There was one piece of good news for the opposition: the DPP gained control of the mayoralty of Taiwan's second largest city, Kaohsiung.