China and Taiwan inched closer to allowing special direct charter flights during the Chinese Lunar New Year, after Beijing said it welcomed talks about the issue with Taiwan envoys.

Taiwan has banned direct transport links with the mainland since the Chinese Nationalists fled to the island in 1949 after losing a civil war with the Communists. Travellers to and from the mainland usually have to go via Hong Kong or Macau, adding about four hours to what should be a one hour flight.

"The mainland hopes the charter flights can be operated by airlines on both sides of the Straits in direct routes so as to really meet the need of Taiwan businessmen doing business in the mainland," a spokesman for Beijing's Taiwan Affairs Office said in a report issued by the Xinhua news agency late on Sunday.

Hundreds of thousands of Taiwanese are believed to make their living in China's booming eastern provinces alone.

Taiwan's Mainland Affairs Council promptly hailed the latest development and agreed to authorize a private group to discuss details with the Chinese authorities.

"Finally, the mainland side responded to our call," the cabinet-level council that formulates policy with Beijing said in a statement after a meeting with six Taiwanese airlines on Monday.

Under government supervision, the Taipei airlines association would file applications with the mainland to seek approval, the statement said. "We urged relevant mainland agencies to cooperate accordingly," it added.

Beijing and Taipei both favor direct transport links to meet the needs of flourishing trade and tourism, but political differences over Taiwan's status have got in the way.

Taipei had insisted that talks on direct flights should be held at government level, asserting that the island is an independent sovereign nation.

Beijing -- which views Taiwan as a breakaway province to be reunited with the People's Republic, by force if necessary -- wants civilian talks on the issue.

Analysts view the Taiwan Strait as Asia's most dangerous flashpoint because of fears that Taiwan President Chen Shui-bian may push the island towards formal statehood in his second four year term. Beijing has said such a move would lead to war.

In 2003, charter flights between China and Taiwan were commissioned only to Taiwan airlines, which had to make a token stop in Hong Kong or Macau.

Many businessmen had hoped the charters would be a harbinger of eventual permanent direct air links, though China has insisted that Taipei must embrace its "one China" policy before opening any such talks.

No agreement could be reached on allowing mainland and Taiwanese airlines to arrange two-way charter flights during the Lunar New Year in 2004.

The Lunar New Year break or Spring Festival begins this year on February 9.