Taiwan and China reached a landmark deal on Saturday to allow non-stop charter flights over the Chinese New Year holiday, a move which could ease tensions between the bitter political rivals.

The one-off deal will allow the first direct flights since 1949 and could mark a step towards ending a decades-old ban on direct air links.

"In a very short time, in a cordial atmosphere, we have come to an agreement," Pu Zhaozhou, executive director of China's Civil Aviation Association, told a joint news conference after talks in Macau.

However, while the flights will be non-stop, they will still have to go through Hong Kong or Macau airspace.

Forty-eight flights will be allowed under the agreement, beginning on January 29 and ending on February 20, Pu said. He did not specify whether the first would take off from China or Taiwan.

Taiwan has banned direct air and shipping links with the mainland since the Nationalists lost the Chinese civil war to the communists in 1949 and fled to the island.

Travellers between Taiwan and the mainland must now fly via a third destination, usually Hong Kong or Macau on China's southern coast, adding four hours to what should be a one hour flight.

China considers Taiwan a renegade province and has threatened to invade the self-governing, democratic island of 23 million people if it formally declares statehood. Taiwan officials responded positively to the agreement and expressed hope that the flights could mark the beginning of greater interaction after years of stalled talks.

"We hope that the smooth negotiations on New Year charter flights will pave the way for further cross-strait talks, and be a turning point for positive interaction," Joseph Wu, chairman of the Mainland Affairs Council told reporters in Taipei.

Wu, whose council charts the government's China policy, said the successful outcome of the discussions guided by the government and assisted by the private sector, had formed a basis for mutual trust between the two sides.

Despite often highly charged political tensions, trade and investment across the narrow Taiwan Strait has boomed since the late 1980s, with about one million Taiwanese now living and working in China.

Taiwan business people, who have poured up to USD$100 billion into China, have long requested direct flights. Millions of Chinese return home for family reunions at the start of the Lunar New Year, which falls on February 9 this year.

During the 2003 Lunar New Year holidays, charter flights between Shanghai and Taipei were commissioned to Taiwan airlines only and they had to fly empty to Shanghai to pick up passengers.

At the time, Taipei did not allow planes to fly directly between Taiwan and China, requiring them to make stops at an intermediate destination.

China refused to allow similar flights last year, fearing it could help win re-election for Taiwan's pro-independence president, Chen Shui-bian.

The new agreement will allow flights from Beijing, Shanghai and Guangzhou on the mainland and Taipei and Kaohsiung in Taiwan, with each side allowed to select six airlines for the routes.

Taiwan airlines could include China Airlines, EVA Air, Trans Asia Airways, Far East Air Transport, Mandarin Airlines and UNI Airways.

From the mainland, airline executives have listed Air China, China Southern Airlines, Xiamen Airlines and China Eastern Airlines as possible candidates.