"Knuckling under China's huge pressure, Chad has decided to restore diplomatic ties with Beijing," foreign ministry spokesman Michel Lu told a midnight press conference.

"To safeguard national dignity, sovereignty, the Republic of China, Taiwan government decided to cut off diplomatic ties with Chad and immediately suspended all of the aid projects to the country," Lu said.

Taiwan's ambassador to Chad was called into the foreign ministry on Saturday and informed that the government had decided to switch recognition "in the interest of the state," a Chadian foreign ministry official told AFP.

Official announcements of the move should be made simultaneously Sunday in N'Djamena and Beijing, where Chadian Foreign Minister Ahmat Allami is currently visiting, said the official who requested anonymity.

China and Taiwan have been separated since the end of a civil war in 1949. Beijing still considers the island part of its territory and has vowed to retake it, by force if necessary.

Following its 1971 expulsion from the United Nations, successive Taiwanese governments have spent millions of dollars in aid to persuade countries to support their battle against China for international recognition.

Beijing refuses to establish diplomatic relations with any country that maintains such links with Taiwan, prompting a sometimes nasty effort by each side to entice smaller nations into formal ties through "dollar diplomacy."

As China's global political and economic clout has grown, Taiwan has found it increasingly on the losing side of the diplomatic battle.

Chad is the seventh country to switch recognition to China since Taiwanese President Chen Shui-bian took office in May 2000, following Senegal, Liberia, Macedonia, the Commonwealth of Dominica, Vanuatu and Grenada.

This latest setback for Taiwan means the island is now recognized by just 24 countries, mostly small states in Africa, Latin America and the Pacific.

Taiwan maintains extensive unofficial ties with countries that do not recognise it, focussing on trade and investment.

Chad's move came only days before Taiwan Premier Su Tseng-chang was due to attend the inauguration of Idriss Deby for a third term as president. The trip has now been cancelled.

Since 1997, when Chad switched its diplomatic recognition from Beijing to Taipei, Taiwan had financed several aid projects there, varying from infrastructure and irrigation to oil exploration and medical help.

At Sunday's press conference, Lu hit out at Beijing, accusing China of providing arms to Chad's rebels through Sudan in order to overthrow the Chadian government.

He also said the Chadian government needed Beijing's financial assistance because the World Bank had put a freeze on income from its oil sales.

"We've noticed the challenges of the Taiwan-Chad ties since the onset of this year and tried everything we could to rescue the ties, but to no avail," Lu said.

He condemned Beijing "for benefiting from Chad's difficult times and undermining Taiwan's diplomatic base".

"We regret that the Chadian leader and government bowed to the pressure of 'the evil force'," he said.

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