The unique negotiation mechanism in the absence of formal ties was shelved with the deaths in 2005 of Wang and his Taiwanese counterpart Koo Chen-fu, who was 88. But the last time they talked was in 1998 because Beijing called off talks in 1999 after the 'two states theory' was proposed by the then Taiwanese president Lee Teng-hui.

President Hu Jintao , in his address at the opening of the Communist Party's 17th National Congress, offered to negotiate a peace agreement with Taiwan, but he also warned the island against formally declaring independence. The source said Mr Yan, who has kept a low profile in recent years, was likely to accept the invitation.

Wang accepted the job as chief negotiator with Taiwan in 1991 at the age of 76. Wang and Koo held preliminary talks in Hong Kong in 1992 and are believed to have reached the so-called '1992 consensus' - but the content and even the existence of such a consensus remains highly controversial.

It is unknown whether Taiwan will name a counterpart to Mr Yan amid a volatile political environment in the run-up to its presidential election next year.

Mr Yan served as minister of the United Front Work Department from 1985 to 1990 and his family is known for its extensive network of Taiwan connections.

A former aide to ousted party boss Zhao, Mr Yan was penalised and removed from all government posts because of his expressed sympathies for students involved in the June 4 protests in 1989 and he was only partially rehabilitated when appointed vice-minister of civil affairs in 1991.

Observers said that being named to such an honorary post marked the famous liberal's full rehabilitation.