The Apple Daily newspaper said the Chungshan Institute of Science and Technology -- the military's weapons development unit -- for the first time test-fired the missile in Chiupeng, the heavily guarded missile base in the southern Pingtung county, on September 25.

The missile, designed with a range of between 600 kilometers and 900 kilometers (360 miles-540 miles), could be used to attack Shanghai, Hong Kong and major coastal cities in the southeast of China should a war break out across the Taiwan Strait, the daily said.

It said that the missile could be launched to an altitude of up to 24 kilometers (14.4 miles) by four attached rockets and then powered by a thrust engine to fly at a speed of Mach-six before it dived at its target.

The test-fire was botched after the thrust engine failed to start, Apple Daily said, however.

"Once successful, the missile would mark a critical breakthrough in the development of a strike-back capability against any missile blitz by China," it said.

The defense ministry declined to comment on the report, but its brief statement on the stance of weapons development was seen as unusual by military experts.

"The country's national defense technology development has been guided by the principle of 'effective deterrent, strengthening defense'," the ministry said.

"We're not afraid of fighting and are ready to fight when necessary, but we are not going to fire the first shot," it added.

Taiwan's long-range missile capabilities have been a point of controversy for decades, with Washington's pressure stalling efforts since the 1970s to develop such weapons.

However, Apple Daily said Taiwan and the US seemed to have reached a "tacit understanding" this time around as the state-of-the-art global positioning system used in its guidance system was from the United States.

Taiwan is keen to defend itself against perceived attacks from across the Taiwan Strait. The Pentagon released a report earlier this year saying Taiwan's most immediate threat was a force of 450 short-range ballistic missiles in the Nanjing Military Region across the straits from Taipei.

Beijing rattled Taiwanese nerves when the People's Liberation Army lobbed ballistic missiles into shipping lanes off Taiwan's two major harbours in 1996 in an effort to intimidate Taiwan against voting for Lee Teng-hui, the then president seeking another four-year term.

Since then, Taiwan has purchased three batteries of US-made PAC-2 Plus anti-missile weaponry and hopes to later buy the more advanced PAC-3 systems. It is also developing its own Tien Kung (Sky Bow) missile shield.

Beijing has repeatedly threatened to invade Taiwan should the island declare formal independence.

Taiwan and China split in 1949 at the end of a civil war.

SPACE.WIRE