Taipei, Jan 13: President Chen Shui-bian took the blame for his ruling party's harsh election defeat, allowing his nemesis to take over party affairs ahead of the presidential poll in two months.

Taiwanese voters used their ballots on Saturday to repudiate Chen, casting doubt over his policies promoting the formalization of the island's de facto independence.

The opposition Nationalist Party won 81 seats in the new 113-seat legislature, handing Chen's Democratic Progressive Party its worst loss at the polls in more than a decade.

``A total setback for the pro-independence course led by Chen Shui-bian,'' the mass market-China Times said in a commentary Sunday. ``The DPP lost ... for condoning Chen and allowing itself to be hijacked by him.''

Chen immediately resigned as DPP chairman. On Sunday, DPP presidential candidate Frank Hsieh agreed to succeed Chen as chairman to help boost the party's sagging morale and plot to win the presidential poll in March.

``We need to have check-and-balance power as one-party control of parliament would mean a setback for Taiwan's democracy,'' Hsieh told reporters. He was expected to take over in the coming days.

As Chen fought hard to strengthen the self-ruled island's separate identity, he has infuriated rival China, irked top ally the United States, and distanced many local voters who fear his provocative policies could raise tensions with China.

China's official China News Service quoted a pro-government scholar as saying Sunday that the DPP's defeat would stymie what China sees as Chen's campaign for formal independence.

``This is beneficial to the development of cross-strait relations,'' Wang Jianmin of the Chinese Academy of Social Sciences was quoted as saying.

Short of its goal of bringing Taiwan under its control, Beijing is seeking to lift the island's restrictions on transport links and investment and wants the island opened up to tourists from the mainland. But Chen has stalled on removing the trade barriers.

In Taipei, several opposition politicians said Chen should be forced to resign as president, but the Nationalist Party's presidential candidate Ma Ying-jeou quickly ruled that out.

``We will not abuse our power but will rather exert caution and usher in a new vision,'' Ma said.

Since Chen was first elected president in 2000, he has basked in the glory of ending the Nationalists' half-century rule in Taiwan and allowing Taiwanese to determine their own future.

The Nationalists ruled China before being expelled by communist forces amid civil war in 1949 and retreating to Taiwan.

Chen's efforts to underscore Taiwan's distinctive cultural and historic roles have been popular with many Taiwanese who detested the Nationalists for their former authoritarian rule.

But Chen was criticized for provoking China with an aggressive pro-independence campaign.

The United States also made it clear Chen's policies toward China were dangerous and provocative _ particularly a planned referendum on Taiwanese membership at the United Nations.

Chen was also criticized for what many saw as manipulation of the independence issue for political gain.

Hsieh will square off against Nationalists' Ma in the March 22 presidential poll.

Hsieh is a moderate who wants closer engagement with China, without compromising Taiwan's de facto independence. But he was forced to take a back seat during the legislative election campaign dominated by Chen.