China denies any connection with detention of Chen

However, Chen's detention would be welcome news to the communist authorities, both for the humiliation meted out to a despised foe and because it has divided the pro-independence opposition and its supporters.

Beijing has moved swiftly to improve ties under Chen's successor Ma Ying-jeou, finalizing long-awaited agreements on liberalized trade, travel and tourism arrangements. Chinese leaders hope those will give a shot in the arm to Taiwan's ailing economy and build support among voters for greater political concessions.

Li Yihu of Peking University's Institute for Taiwan Studies said Beijing viewed Chen's detention as a major blow for the opposition Democratic Progressive Party, but would be careful not to be seen as exploiting the Chen scandal.

"It is the decision made by Taiwanese legal departments and a matter of the internal affairs of Taiwan. The mainland government will adopt a policy of noninterference. The government will wait and see what effect the matter would have on the relations between the two sides," Li said.

Chen, whose family is embroiled in bribery and money laundering allegations, defiantly predicted his arrest late Monday, then early Tuesday attempted to link it to alleged attempts by Ma to placate China in the wake of last week's violent anti-China protests.

Ma's Nationalist Party has called such claims an attempt to divert attention from allegations that Chen's son and daughter-in-law moved millions of dollars to Switzerland in 2007, then forwarded the funds to an account in the Cayman Islands.

In calling for Chen's detention, prosecutors said they wanted to determine whether the funds were indeed donations left over from political campaigns - as Chen insisted - or whether bribery might have been involved.

Under Taiwanese law, Chen can be detained for up to four months while investigations continue. His detention does not constitute a formal indictment.

Chen's detention was front-page news in much of China's state-controlled press and was featured prominently on government television's noontime national news broadcast, reflecting both the high profile of the case in the Chinese-speaking world and a fascination with political scandal on the part of the Chinese public.

Although corruption is rife among Chinese officials, draconian secrecy rules and limits on state media keep most details from appearing in the press, creating a hefty appetite for rumor and gossip.

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