At a minimum, analysts expect Tsiang Yien-si, 79, secretary-general of the Office of the President, to be replaced by Interior Minister Wu Po-hsiung, 55.

Mr Tsiang said last night that he had submitted his resignation to Mr Lee who had informed him that Mr Wu would be appointed to the post.

Professor Lin Chia-cheng of Taipei's Soochow University sociology department said the promotion would reward Mr Wu for backing his party rival James Soong in the latter's successful gubernatorial campaign.

'It would set Mr Soong and Mr Wu in place to assist Mr Lee's possible presidential bid and help secure votes from the Hakka community,' Mr Lin said.

Mr Tsiang's role as a mediator among rival KMT factions was less vital now given the decline of the mainland-born elders' opposed to Mr Lee, he said.

Mr Lin believes Mr Wu will be replaced as Interior Minister by Huang Kun-huei, 58, chairman of the Mainland Affairs Council (MAC), which co-ordinates policy towards China.

Huang Hui-chen, executive director of the private Institute for National Policy Research, said it was very likely that the MAC chairmanship would go to Vincent Siew, chairman of the Council for Economic Planning and Development.

Although Mr Siew was said to be reluctant to take up the new post, Huang Hui-chen believes his appointment 'could point to more constructive cross-strait ties with economics and trade as the guiding core'.

Legislator Hsieh Tsung-min of the opposition Democratic Progressive Party objected to Mr Siew's possible appointment, saying it was 'a blatant case of business interests dictating Cabinet appointments and our delicate policy toward China'.

Eyes are also on the Defence Ministry to see whether Sun Chen, 60, is replaced. His most likely successor would be retired general Chiang Chung-ling, 72, Mr Lee's main adviser on military affairs.