Analysts said the legislation was aimed at countering Taiwan's march towards independence after Taiwanese President Chen Shui-bian unveiled a timetable for drafting a new constitution, putting it to a referendum and declaring independence in 2008.

Although details were not made available, the law could give the mainland legal grounds to use military force to attack Taiwan if the island declares independence.

But the anti-secession law falls short of being a unification law, which would have wider implications, analysts said.

In a separate statement, Xinhua quoted a leading official of the NPC Standing Committee's legal affairs commission as saying the law would not apply to Hong Kong or Macau.

Mainland analysts and the Hong Kong government were quick to welcome the announcement last night, while officials in Taipei denounced it.

'This will be a law that defines the bottom line,' said Yu Yuanzhou , a professor from the College of Law at Jianghan University.

It should be seen as a prelude to a unification law, which would be more comprehensive in spelling out steps for peaceful unification, he said.

The implementation of a unification law is seen as a way of providing the legal basis for countering the Referendum Law in Taiwan and the Taiwan Relations Act in the United States, which provide a domestic legal basis for aiding Taiwan in its defence.

In Taipei, the Mainland Affairs Council warned Beijing against drafting such a bill, saying it would only hurt the feelings of Taiwanese people and force the island to drift further away from the mainland.

'The drafting of such a statute is an attempt by the Chinese communists to find an excuse to justify future action to invade Taiwan and unilaterally change the status quo of the Taiwan Strait,' said Joseph Wu Jau-shieh, the council's chairman.

In Hong Kong, Secretary for Constitutional Affairs Stephen Lam Sui-lung said the Hong Kong people would support the law, as it would help safeguard national integrity with legal means.