Reports reaching the Daily Observer have revealed that President Chen Shui-bian of Taiwan, yesterday, resigned as Democratic Progressive Party (DPP) chairman following the party's major defeat in the legislative elections.

"This is the most disastrous defeat since the establishment of the party," Chen was quoted as saying at a press conference.

"As the party chairman, it is my inescapable responsibility to seriously face the matter and shoulder the responsibility with courage."

According to reports monitored from the Taiwanese newspaper, Taipei Times, Chen said his resignation was effective immediately and the party would call a provisional Central Executive Committee meeting tomorrow to elect a new leader.

DPP legislative caucus leader, Ker Chien-ming revealed last night that the party had reached a consensus to recommend that DPP presidential candidate, Frank Hsieh, takes over the chairmanship.

Flanked by Hsieh, Hsieh's running mate, Su Tseng-chang and other party bigwigs, Chen congratulated the Chinese Nationalist Party (KMT) for winning the elections.

"Let's examine our mistakes, adjust our approach and start anew," he said. "We lost the legislative elections, but we cannot lose Taiwan."

Chen called for unity and asked party members to follow Hsieh's leadership and make an all-out effort to win the people's trust again in March.

Vice President Annette Lu did not appear at the press conference. Chen and other party officials left straight after his speech.

With the KMT's solid victory, analysts foresee a legislature dominated by one big party and backed by big-money donors. As it is hard for smaller parties to put bigger parties in check, the future of partisan politics looks dismal, they said.