Aided by US-made early-warning radar, the system would play a crucial role in defending Taiwan's skies from attacks by Chinese ballistic missiles, the report said. The defense ministry declined to comment.

The ATBM, evolved from the existing "Tienkung" (Sky Bow) missiles, had been scheduled to begin operating from 2005. The military-run Chungshan Institute of Science and Technology, its developer, has not explained the delay.

The island's missile shield would eventually be composed of 12 ATBM batteries and an uncertain number of US-made Patriot missiles, the daily said.

Taiwan President Chen Shui-bian in July renewed his warning of China's growing military threat, saying it was now targeting the island with 784 ballistic and 36 cruise missiles, and that the number of missiles was rising at the rate of 120 per year.

A Pentagon report has said China is building up its military at a pace that is tipping the balance against Taiwan and could pose a credible threat to other armies in the region.

Taiwan has installed three batteries of PAC-II Plus missiles, the improved version of the first Patriot, to defend the densely populated greater Taipei area.

Beijing has repeatedly vowed to invade Taiwan should the island announce independence, prompting Taipei to seek more advanced weaponry.

Related Links
Learn about missile defense at SpaceWar.com