'This is a victory for people who hope for change and openness and reform,' he told his jubilant Kuomintang (KMT) supporters after trouncing ruling party chief Frank Hsieh by around 17 percentage points.

Soft-spoken and Harvard-educated, Mr Ma has promised to work for closer ties with China, including a peace treaty to put an end to decades of hostilities, and to revive Taiwan's own stuttering economy.

The vote has been closely watched by Beijing and Washington for signs of a new approach in the flashpoint region after eight years of recurring tensions under outgoing President Chen Shui-bian.

Final official figures released by the election commission showed that Ma won 58.45 per cent of the vote, with Hsieh on 41.55 per cent.

'This election result is not a personal result, nor a victory for the KMT, it is a victory for all Taiwanese people,' Mr Ma said.

'Your voices are heard. People have the right to demand a better life. Only change can bring hope, only change can provide opportunities.'

At almost the same time, Mr Hsieh was admitting defeat in a speech to his own despondent Democratic Progressive Party (DPP) supporters in Taipei.

'We accept defeat. It's my own defeat, it's not the defeat of the Taiwanese people. Please don't cry for me,' he said.

Mr Ma will formally take over on May 20, when Mr Chen steps down after serving a maximum two terms in office.

KMT supporters sang, danced and let off firecrackers as they partied in the capital Taipei and elsewhere.

Mr Ma's victory gives the KMT overall control of the nation, as they had also crushed the DPP in parliamentary elections in January on the back of an economic malaise and weariness at the strained relations with China.

Soochow University professor Liu Bih-rong, who specialises in cross-strait relations, said the landslide was unexpected.

'The election result shows Taiwan has grown into a more mature democracy,' he said, predicting relations with China would improve at a faster pace.

'It shows that the Taiwanese people have given the KMT the mandate to open direct links and push for the one common market with China.'

After casting his ballot earlier in a Methodist church building in Taipei, Mr Ma had vowed to normalise trade and investment relations with China.

China still claims Taiwan for itself and has threatened an invasion if it declares independence, confining the US-allied island to a murky limbo of de facto but unrecognised sovereignty.

The two have had virtually no direct links since the island split from the mainland in 1949 after a civil war.

'I have always said that, if I get elected, I will engage the mainland on many issues, but I will protect Taiwan's identity and also its security,' Mr Ma said.

Mr Ma has been more aggressive than Mr Hsieh in proposing a radical overhaul of economic ties to allow Taiwanese companies access to the vast mainland market, while permitting Chinese investors to pump funds into the economy here.

The island is the world's 17th largest economy, mainly on the back of its information technology sector, but is losing jobs and investment to mainland China, while incomes are stagnant.

Mr Hsieh also favours closer ties but is more cautious, warning Ma's plan may engulf Taiwan with Chinese money and labourers.

China's military crackdown in Tibet also allowed Mr Hsieh to attack Mr Ma's plan, but it appeared to have cut little ice.

Separately, two referendums on joining the United Nations failed to muster enough turnout to make them valid, with less than 36 per cent of voters making the effort to cast their ballot.

The referendums were controversial because Taiwan lost its UN seat in 1971 to China, which has blocked its 15 attempts since then to rejoin. -- AFP

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