Hsieh announced his resignation while meeting with the party's decision-making Central Standing Committee for the first time after last Saturday's crushing defeat to Kuomintang contender Ma Ying-jeou.

"I've said that this was not a defeat for democracy, but a personal setback. I am willing to accept that responsibility," Hsieh told the CSC meeting in his resignation speech.

He also suggested four directions the DPP should consider while striving for a comeback.

He said the party has to rethink its position in the political spectrum, and recruit more young people to join its ranks.

The DPP must call an extraordinary session of its party congress, and try to play a competent check-and-balance role in the opposition, he said.

Hsieh said, "Different voices can be heard and the party's future development can be worked out through a brainstorming process" during the party congress.

"We must let the sound of reform ring out," Hsieh said.

He warned that if the party fails to overhaul itself, it "could be thoroughly marginalized."

He also publicly admitted for the first time that the notion of "Taiwan identity," which stresses the island's nationhood against rival China's sovereignty claim, may not be an effective tactic for attracting support.

Hsieh, who had made a pre-election vow to retire from politics if he lost the race, left after making the speech without attending the rest of the CSC meeting.

The CSC later decided to ask Hsieh to stay on at least until May 25 when the party elects a new chairman.

DPP Secretary-General Lee Ying-yuan told reporters after the meeting that all CSC members hoped Hsieh could be in charge of reform efforts until a new chairman is elected.

Asked if Hsieh would stay on, Lee said he had no idea.

The CSC also decided to expand the scope of post-election evaluation efforts to determine why the DPP lost and where it should be heading.

CSC member Chen Ming-wen proposed that the evaluation efforts include a conference of representatives from all backgrounds, to be organized by the younger generations of the party.

The conference will probe the directions of the party's reform so it can meet supporters' expectations for the DPP, Chen was cited as telling the CSC meeting.

The CSC scheduled an extraordinary meeting for the party's Central Executive Committee at 4 p.m. today to discuss details of the evaluation conference, as well as the extraordinary meeting of the DPP congress.

The CSC meeting yesterday did not touch on the causes of its defeat in last Saturday's election.

Ma triumphed over Hsieh by more than 2 million votes, delivering a second blow to the DPP in a two-month period.

With the KMT securing almost three-fourths of its seats in the legislature after the January elections, Ma's victory means his party will be in total control come May 20 when he is sworn in.

Observers say it will be very difficult for the DPP to mount a comeback, having lost the people's trust during its eight years of controversial rule.

The DPP has never won majority support from voters, except for President Chen Shui-bian's narrow victory in the 2004 election under controversial circumstances.