The new chairman, who will be formally elected on May 25, will have his task cut out for him as the DPP seeks a new party line and identity to recover lost ground.

Mr Hsieh, 61, suffered a stinging setback in the presidential election on Saturday, losing the contest to the Kuomintang's (KMT) Ma Ying-jeou by a whopping 17 percentage points.

Mr Hsieh, a former premier, managed to garner only 41.6 per cent of the vote - compared to 50.1 per cent won by incumbent Chen Shui-bian in the last election in 2004.

He gave some sobering advice to his party at its central standing committee meeting yesterday.

'The DPP has suffered three electoral defeats since 2005. It is high time we re-examine the party's structure, nomination system and party line,' said a sombre-looking Mr Hsieh. 'If we don't overhaul the party, we could be marginalised in future elections.'

The pro-independence DPP, which swept to power in 2000, was also routed in the parliamentary race in January and local polls in 2005.

Still, Professor Lin Jih-wen of the Academia Sinica, Taiwan's top research institute, said the DPP could represent the 'possible victims of greater cross-strait economic integration, such as farmers and labourers'.

It could also be a 'veto player' on issues related to cross-strait economic or political links because it still represents 40 per cent of the populace, said Prof Lin.

Possible candidates for the party chairmanship include Mr Hsieh's running mate Su Tseng-chang, former premier Yu Shyi-kun and former presidential secretary-general Yeh Chu-lan.

But there are calls within the party to elect a younger candidate - such as former lawmaker Luo Wen-chia - who has a chance of contesting for the island's presidency.

'I think we should first pick a senior heavyweight who can unite the party,' said Mr Lin Shu-shan, a former DPP legislator.

'A younger leader can take over, say, two years later. There is no urgency because I don't think we stand a chance of wresting back power in the next election four years later.'