The approvals bring the number of firms that have entered the reform process to 1,301 - 97 per cent of all eligible listed companies representing almost 98 per cent of the combined market capitalisation.

In August last year, senior regulatory officials said there could be as many as 80 to 100 companies yet to start the reforms by the beginning of this year.

Companies that have not finished the reform are not allowed to raise funds or conduct any other operations that require CSRC approval.

'No regulation under the non-tradable share reform requires these companies to be delisted but obviously some of them eventually will be,' CSRC vice-chairman Tu Guangshao told the South China Morning Post last year.

The most high-profile stock to have its reform programme rejected by investors is Shenzhen Development Bank, which sold a 17.89 per cent stake to United States private equity firm Newbridge Capital in 2003 to become the first mainland bank to be controlled by a foreign investor.

The bank has not yet come up with a revised plan, despite a dire need for new capital.

The current reform programme, which began in mid-2005, aims to compensate minority shareholders and eventually make tradable the about 66 per cent of all shares that were designated state-owned and non-tradable at the inception of the stock markets in 1990.

When the plan to essentially privatise a huge number of state companies by allowing their state-held shares to be freely traded was first proposed in 2001, it caused stock prices to collapse because of the fear of a massive supply of shares hitting the market.

But the success of the new plan has revived investor confidence in the markets, particularly in the second half of last year.

'This reform has been the single biggest reason for the huge jump in the mainland markets in 2006,' Pinpoint Asset Management managing director Sunny Li said.

By last Friday mainland markets were up almost 170 per cent from the start of the reforms when four years of government indecision had driven prices to eight-year lows.

Mainland markets are closed until tomorrow for a public holiday.

Some analysts point out that very few formerly state-owned shares have actually been sold into the market yet and lock-up periods included in the reforms mean the prospect of a flood of previously non-tradable shares hitting the market has merely been postponed.

As of the end of November, the market capitalisation of mainland-listed companies was 7.09 trillion yuan, 2.15 trillion of which was freely tradable on the exchanges.