An article in the leading People's Daily carried some of Beijing's strongest rhetoric since Lee's July 9 insistence that relations with China were on a ``state-to-state'' basis.

``The one-China principle is the basis and prerequisite for developing cross-strait relations and reuniting the motherland,'' the report said.

``On this basic issue Lee Teng-hui has destroyed the foundation for developing relations across the straits, making the basis for contacts, exchanges and dialogue between SEF and ARATS non-existent.''

The statement signalled Beijing's apparent readiness to renounce political means as a way to resolve the long-standing reunification issue.

No official government position was immediately available, but the foreign ministry last week said China was prepared to cut off exchanges between themainland's Association for Relations Across the Taiwan Straits (ARATS) and the Taiwan Straits Exchange Foundation (SEF) if Taipei did not adequately clarify Lee's comments.

China has vowed to use military force to reunite Taiwan if the rebel island declares independence or if foreign forces interfere in the reunification issue.

Military exercises underway: Report

BEIJING: The Chinese military has begun large-scale military exercises in an unnamed location in response to mounting tensions with Taiwan, an official newspaper reported on Sunday.

``Several special forces detachments of the People's Liberation Army have gathered and are holding large-scale military attack exercises in a certain military region,'' the official Life Times daily reported. ``The Taiwan situation has suddenly intensified and China's People's Liberation Army stands in combat readiness to firmly defend the unity of the motherland and territorial integrity," the report said. The Life Times, run by the CommunistParty-run Guangming daily, attributed the story to the China.com website, operated from Hong Kong and partially owned by China's state-run Xinhua news agency. It was the first acknowledgement in the state-controlled press that the military exercises had begun.