Taiwan?s Parliament agreed key clauses of a controversial bill allowing for referendums on issues such as sovereignty, despite warnings from China that the step would move the island closer to independence.

Legislators voted on 56 clauses of the bill in a second reading, and a third and final reading will take place later in the evening.

Assuming no parliamentarians call for a vote to reject the bill, it will be presented to pro-independence President Chen Shui-bian for signing into law.

If passed, the bill would openly defy China?s threats ahead of Taiwan?s presidential elections next March, where the issue of the island?s sovereignty is likely to take centre stage.

As Parliament reviewed the bill, China?s state media called Chen a troublemaker and said he was bringing disaster to the island.

?The referendum plan on a ?new constitution? will not be tolerated by the Chinese people, including the compatriots in Taiwan,? the official Xinhua news agency quoted an article slated to run today in a key Communist Party newspaper as saying.

China regards Taiwan as a renegade province and has vowed to attack the island if it declares independence.

The clauses on the bill range from the mundane, such as technical matters on holding a referendum, to issues that can be voted on, such as a plebiscite on Taiwan sovereignty in the event of an attack from China ? a step bound to enrage Beijing.

Parliament passed the sovereignty clause 108 votes to 82.

It also passed 114 votes to 96 a clause that allows referendums on constitutional matters.

But matters Beijing considers steps towards independence, such as changing the flag or the island?s official name, the Republic China, would have to be approved by a legislative committee.

Alice Hung