A Beijing-controlled newspaper in Hong Kong has reported that China's armed forces have been placed on high alert since President Lee announced earlier this month that Taiwan's ties with the mainland should be treated on a state-to-state basis.

Reports published in Wen Wei Po said troop movements had been observed on the coast facing Taiwan involving forces from three of China's seven military regions.

Peter Biles reports: "There is extreme tension between China and Taiwan"

So far, there has been no confirmation from officials in Beijing of any military response by China to the recent escalation of tensions with Taiwan. However, China has repeatedly warned that it could not rule out the use of force.

'China to blame'

President Lee Teng-hui: 'State-to-state' not 'independence'

Mr Lee, speaking on television to local businessmen, said that Beijing's one-China policy was to blame for what he called the inability of the two sides to achieve any fundamental improvement in their relatioinship.

However he said he was not seeking independence for his country by insisting it was a separate state from communist China.

"I did not say this to declare independence," he said.

Armoured troop carriers

War of words: Pro-unity propaganda on a Chinese beach facing Taiwan

Wen Wei Po quoted eyewitnesses as saying the weapons and equipment carried by the soldiers suggested they were not involved in a straightforward rotation.

The newspaper published a picture of troops marching alongside a column of armoured personnel carriers, but it did not say where or when the picture was taken.

Taiwan has accused Beijing of planting stories in the press in order to scare people on the island.

On Monday, US State Department spokesman James Rubin said Washington did not believe that China was mobilising its armed forces.

James Miles: "Many analysts believe China is preparing to stage war games"

He said there had not been what he described as any extraordinary developments beyond the country's regular military activities.

BBC Beijing correspondent James Miles says the Wen Wei report is likely to be authoritative.

In Beijing, the official China Daily newspaper has published an opinion poll which it said showed that more than 85% of Chinese backed their government's view that military force could be used against Taiwan "when necessary".