“The two, running for the Taipei city council positions last year, failed to report … the source and the amount of the contributions after the race, and for this they were charged with violating the election law,” a spokesman for the Taipei district prosecutors office said.

The pair, who are also senior figures in the hard-core pro-Beijing Chinese Patriotic Alliance Association failed to win election to the city council. Both have denied wrongdoing, saying they had no idea they were required to declare funding.

According to prosecutors, all candidates running for public posts must declare the amount and source of the political contributions they have received within five months after the election is held.

Chou also denied that the contribution had been given to him by the mainland authorities to influence the island’s politics.

“The contribution was from a company I owned on the mainland,” Chou said, adding he merely transferred the money to help finance the campaign.

Prosecutors said Chou owns a farm house in Hubei province in central China. Last year he transferred the equivalent of NT$1.89 million from the mainland and donated the money to his party, but the donation was considered by prosecutors to be an illegal contribution because of its origins.

Under Taiwanese law, political contributions from foreign countries, the mainland, Hong Kong and Macau are prohibited and offenders can face up to five years in jail.

Beijing – which considers Taiwan a wayward province that must eventually return to the mainland fold, by force if necessary – has been accused of stepping up its efforts to influence January’s election to prevent President Tsai Ing-wen winning a second term.

Tsai, from the independence-leaning Democratic Progressive Party, has refused to accept the one-China principle and various opinion polls have shown that she is leading in the run-up to the presidential poll to be held in January.

Observers said the decision to charge the pair was part of the government’s efforts to counter growing mainland interference in the island’s elections.

“Actually, the persons involved are not running for the presidency or any parliamentary seats. The charges are meant to tell China that Taiwan is aware of what Beijing is trying to do,” said Wang Han-hsing, a lawyer specialising in cross-strait and electoral law.

Yao Li-ming, head of Taipei-based Parliament Watch Foundation, said it was no longer news that the mainland was trying to “stretch its hand into Taiwan’s elections”.

At one time the mainland would directly send money to someone in Taiwan to try to sway the election results, but in recent years, it has been doing so in a more subtle way, he said.

“Relevant Chinese organisations, like the Taiwan Affairs Office, have been known to ask Taiwanese businessmen based on the mainland to contribute funds to certain party candidates whom they prefer,” Yao said.

Taiwan’s Investigation Bureau also said there was intelligence to suggest that Beijing was also bribing media outlets and popular social media accounts to spread fake news and attack or promote certain candidates.

It said intelligence indicated that some candidates’ aides were being used to organise tours of the mainland or foreign countries that would allow Beijing to promote its favoured candidates.

In a recent report, the US-based Global Taiwan Institute also warned that Beijing was trying to get round the laws on mainland funding by using favoured Taiwanese businessmen to direct funds towards its favoured candidates.

It also warned there were concerns about“Chinese funding of gang-linked political organisations” and said “addressing legal but problematic campaign finance will be a key challenge for the Tsai administration”.

Tsai’s main challenger is likely to be Han Kuo-yu, the candidate from the main opposition party Kuomintang, who is seen as Beijing’s favoured candidate due to his mainland-friendly stance.

However, according to the most recent polls, Tsai is about 10 points ahead, with her campaign strategy emphasising defence of the island against pressure from the mainland.