TAIPEI (REUTERS) - The Taiwan government will halt construction at the island's fourth nuclear power plant, an official said on Sunday, as local opposition to atomic energy continues to mount.

President Ma Ying-jeou met with lawmakers from his Kuomintang Party (KMT) and reached a decision to seal off the plant's first reactor after the completion of safety checks, KMT spokesman Fan Chiang Tai-chi told reporters.

Construction of the second reactor will be halted immediately, the spokesman added.

The move is the latest sign of pressure on Mr Ma's administration from opposition parties and anti-nuclear activists, who are concerned about the safety of such facilities in earthquake-prone regions of Taiwan following the 2011 Fukushima disaster in Japan.

Tens of thousands of protesters gathered in downtown Taipei over the weekend, urging the government to abandon nuclear energy.

On Friday, Mr Ma refused opposition demands for an immediate referendum on the future of Taiwan's contentious fourth nuclear plant, but reiterated that the government would hold such a vote before the facility starts operations.

The news triggered a 2 per cent drop in Taiwan's share market due to fears higher electricity prices could dent the economy.

The fourth plant is located in northern New Taipei City.

Taiwan's three current nuclear power facilities would have to serve longer if the fourth one does not start operating as planned, the economics ministry has said.

Taiwan's first nuclear plant is set to be decommissioned from 2018-19, while the second is set to close between 2021 and 2023.

Some 40 per cent of the island's electricity is generated by burning coal, 30 per cent using natural gas and 18.4 per cent by nuclear power plants, according to the economics ministry.

Taiwan sits near the so-called ring of fire region of seismic activity around the Pacific Ocean.