The proposal came after Taipei and Beijing held historic talks on the island last week, during which they inked deals to forge closer economic ties and agreed to promote educational exchanges.

According to Taiwan's education ministry, Chinese students would be allowed to apply for local universities on condition that they return to China once they have completed their studies.

The ministry also planned to recognise diplomas issued by 'reputable' Chinese universities and graduate schools, but not including medical studies.

An estimated 7,000 Taiwanese students are currently enrolled in higher education in China, according to officials.

The proposal is expected to be submitted to parliament for approval as early as the end of this month, officials said.

China and Taiwan split in 1949 after a civil war but Beijing still considers the island to be part of its territory and has threatened to invade if Taiwan moves toward formal independence.

Ties have improved dramatically since Beijing-friendly President Ma Ying-jeou came to power earlier this year on a platform of boosting economic ties with China. -- AFP