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"In my negotiation with the Marshall Islands in the past half year, we had never discussed the nuclear waste disposal issue," Foreign Minister Jason Hu told reporters.

Hu said he was unaware of the details of previous negotiations between state-run Taiwan Power Company and the Marshall Islands to build a disposal site on the tiny Pacific islands.

Taiwan announced on Friday its establishment of official relations with the Marshall Islands - a tiny archipelago of only 171 square km (106 square miles) roughly midway between Hawaii and Australia with a population of just 57,000.

Local environmentalists have seen the new ties as part of a government effort to locate a dump site for its unwanted nuclear waste, as well as a way of boosting the number of Taiwan's allies in the face of a growing diplomatic squeeze by China.

Taipei has been troubled by worries over the disposal of the nuclear waste produced by its three nuclear power plants.

Its main waste dump on Lanyu island southeast of Taiwan, whose 98,112-barrel capacity has nearly been exhausted, must be cleared and closed by 2002 under an agreement with local residents.

The state power utility has to find a new deposit site for the waste. In recent years, Taiwan Power has discussed disposing of its nuclear waste on the Marshall Islands, but opposition from environmentalists has frustrated the proposal.

Taiwan Power signed a deal with North Korea in January 1997 to ship 60,000 barrels of low-radiation waste to Pyongyang with an option of shipments of up to 200,000 barrels.

But heavy pressure from home and abroad, particularly from North Korea's arch rival South Korea, has stalled the deal.

Beijing, Taipei's long-time rival since a civil war split in 1949, has also opposed the deal.

The November 20 signing of a communique by Taiwan and the Marshall Islands to establish formal relations has also triggered protest from Beijing, which has regarded Taiwan as a mainland province ineligible for sovereign contact.

The action gave Taiwan a modest victory in its diplomatic tug-of-war with China, especially after four Taiwan allies switched ties to Beijing in 1998 -- leaving it now with just 27, including the Marshall Islands.

(C) Reuters Limited 1998.