Lee held a closed-door meeting with Chang Jung-feng, deputy secretary-general of Taiwan's National Security Council, at a resort in the north of the island in the third day of his four-day visit.

Chang said their discussions ranged from Taiwan's economy, anti-terrorism, Taipei-Beijing ties and the general situation in the Asia Pacific region.

"I asked him how Singapore solved its economic problems," Chang said.

As with Taiwan, Singapore relies heavily on US demand for high-tech products and was also hit hard by the global economic slump.

But Chang was swift to play down the significance of Lee's ongoing trip, saying Lee has not passed on any message from Beijing. The trip immediately followed his visit to Beijing.

On Thursday, Lien Chan, chairman of the leading opposition Kuomintangand a former vice president, hosted a luncheon for Lee.

Local newspapers suspected Lee was visiting Taiwan as a mediator between Taipei and Beijing while their ties remain strained over Beijing's "one China principle."

Since his arrival, Lee has met with Taiwan's China policymaker Tsai Ing-wen, top envoy to China Koo Chen-fu and de facto US ambassador Douglas Paal.

President Chen Shui-bian is expected to host a dinner to entertain Lee Thursday.

Taiwan's government has kept Lee's trip low-profile and refused to issue an itinerary, apparently for fear of annoying Beijing which has already expressed its "regret and dissatisfaction" with the visit.

Beijing opposes any official visit to Taiwan which it regards as part of its territory awaiting reunification, by force if necessary.

The trip also comes just after an escalation in tensions between Taiwan and the mainland, sparked when President Chen said each side of the strait was a country and that the Taiwanese people had a right to hold a vote on their future.

China reacted furiously to the remarks and warned that Chen was leading the island toward "disaster."

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