Taiwan test-fires missiles

"Once deployed, it would mark the first time that Taiwan is able to put 'strategic weapons' into use. Its political and military impact would be far-reaching," the paper said.

Taiwan could begin "small initial production" of the Hsiung Feng, with a 1,000-km range that could hit military bases in China's southeast, this year or in 2006, the Chinese-language newspaper said, quoting unidentified sources.

The defence ministry declined to comment on the report.

The newspaper said Defence Minister Lee Jye witnessed the test firing of the missile from Chiupeng military base in the southern Pingtung county. The missile flew over 500km (300 miles) before hitting its target.

The report did not specify when the test took place but speculated that it could have been in March.