Nov. 6 (Bloomberg) -- Taiwan Premier Wu Den-yih said he won’t quit over revelations he traveled to the Indonesian resort island of Bali with a convicted gangster.

Opposition politicians have called for Wu to resign. His traveling companions to Bali included Chiang Chin-liang, who was sentenced for 20 years in 1986 for crimes including murder, extortion and arms smuggling, Next Magazine reported Nov. 4.

“Chiang is a reborn person and has done a lot of good deeds,” Wu said at a press conference in Taipei today. “Society should give him another chance.”

Wu’s judgment may intensify criticism of President Ma Ying- jeou, who was forced to remove his first prime minister two months ago following a public outcry at the government’s handling of disaster relief after a deadly typhoon. Ma’s predecessor Chen Shui-bian was sentenced to life imprisonment for graft in September.

Wu, who at the time of the trip held no government position and was secretary-general of Ma’s ruling Nationalist party, said he paid his own expenses.

Wu said he and Chiang traveled to Bali in a group fact- finding mission to look at ways to promote tourism in the central county of Nantou.

Chiang was invited to take part in the trip because he heads a group that supports the KMT leader of the county, Lee Chao-ching, who is seeking re-election in December, Next claimed. Lee also went to Bali, Next said.

Opposition Leak

Wu accused opposition politician Lee Wen-chung of leaking the information to Next, and said allegations that he was involved in any dealmaking with Chiang were false.

“If he can prove that, I will resign immediately,” Wu said. If Lee can’t provide proof within three days “then he has to publicly apologize, correct his statement or I will sue him for libel.”

Ma must prevent the year-end elections from becoming an opportunity for gangsters to expand their influence and the KMT must sack Lee if he is involved in corruption, Tsai Ing-wen, chairwoman of the opposition DPP said in an e-mail statement.

Chiang escaped after three years in jail, was recaptured in 1990 and served 12 years before being released on parole, Next said. The parole ends in 2017, it said.

Chiang, now chairman of the Straw Sandals Pier Night Market Development Association, also denied the allegations against him.

“I have already paid a heavy price for the wild things that I did in my youthful days, and yet it’s still a cause for people to comment,” he said in a faxed statement. His past “created problems for other innocent people. For this I am very sad and deeply sorry,” he said.

Wu predecessor Liu Chao-shiuan and his entire cabinet quit over their late response to Typhoon Morakot, which killed more than 600 people. At the time, Ma faced criticism for his choice of officials because of their perceived poor judgment.

As rescuers searched for victims of Morakot buried in mud slides and swept away in floods, Liu was reported to have taken time out to get his hair dyed. His failure to visit the area quickly led to a public outcry at his perceived lack of sensitivity.

To contact the reporter on this story: Janet Ong in Taipei at jong3@bloomberg.net.

Last Updated: November 6, 2009 00:47 EST