TAIPEI - TAIWANESE prosecutors said on Wednesday they were investigating former president Lee Teng-hui over allegations that he had accepted huge funds from China.

'We are looking into the charges brought against Lee,' said prosecutor Chu Chao-liang, declining to disclose the amount of money allegedly involved or the source of the allegation.

Lee was branded a 'splittist' by China for seeking a separate identity for Taiwan during his 1988-2000 tenure. Beijing fired missiles near the island in 1995 and 1996, prompting the United States to send in patrolling warships.

He was already under investigation on suspicion of money laundering, after his graft-tainted successor, Chen Shui-bian, brought the charges against him.

Chen has alleged on television that his predecessor transferred around NT$1 billion (S$46 million) abroad through dummy accounts - charges Lee angrily rejected.

On Tuesday, Chen turned against Lee again and claimed that Lee and the TSU 'received NT$200-300 million from the Chinese Communist Party' despite the TSU's pro-independence policies.

Lee has yet to comment on this while the TSU has dismissed the allegations.

The pro-independence Chen insisted that corruption charges against him were politically motivated as he returned to court this week in a case in which his wife has already pleaded guilty.

China still sees Taiwan as part of its territory to be reunified, by force if necessary, after their split in 1949 at the end of a civil war. -- AFP