"The United States has voiced concerns to Taiwanese authorities as the missile has exceeded the 300-kilometer limit" under the Missile Technology Control Regime, the Chinese-language paper said.

The MTCR is a voluntary association of countries aimed at preventing proliferation of such missiles, although Taiwan is not a signatory.

China's southeastern coastal cities in Fuzhou and Guangdong provinces would be within range of the cruise missile which will be launched from Chiupeng military base in Pingtung county, the website said.

Taiwan has reportedly test-fired cruise missiles in the past although the defence ministry has never confirmed the launches.

The ministry declined to comment on Thursday's report which comes just one day after North Korea test-fired seven missiles, including a long-range Taepodong-2 capable of reaching the United States, sparking international outrage. The missiles splashed down in the Sea of Japan (East Sea).

Taiwan has produced three prototypes of a cruise missile which could be used to strike the east coast of China, Jane's Defence Weekly has said.

In an article in January, the authoritative weekly said Taiwan plans to produce 50 of the missiles called Hsiung Feng 2E (Brave Wind) before 2010 and up to 500 after 2010.

"If deployed on Penghu Island in the south or Tungyin Island in the north, it could strike as far south as Hong Kong and as far north as Shanghai," a source was quoted as saying in the article.

China has repeatedly threatened to invade Taiwan should it declare formal independence, prompting the island to seek more advanced weaponry to defend itself.

The Pentagon released a report in July last year warning that China had deployed up to 730 ballistic missiles targeting Taiwan. It said Beijing's build-up could tip the military balance against Taiwan and threaten other countries in the region.

Taiwan's military-run Chungshan Institute of Science and Technology, the developer of the cruise missile, is planning to extend its range to 1,000 kilometers, the weekly said.

The Chungshan Institute is also working on a short-range ballistic missile based on the Tien Kung (Sky Bow) air-defence missile system, the weekly said.

The ballistic missile and cruise missile are integral to Taiwan's "active defence" policy, which aims to counter any aggression before it reaches Taiwanese territory, it said.

Relations between China and Taiwan, which split in 1949 at the end of a civil war, have worsened since independence-leaning Chen Shui-bian was elected president in 2000. He was re-elected last year.

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