March 23 (Bloomberg) -- Taiwan opposition parties rejected a proposal from President Chen Shui-bian's ruling party to pass a law enabling a recount of the presidential election, saying legislation is unnecessary.

``This is a smokescreen,'' said Tsai Chi-fang, party whip for People First Party speaking on behalf of the opposition alliance with the Nationalist Party. `` The government can just issue an executive order for a recount without legislation.''

Ruling Democratic Progressive Party lawmaker Chen Chi-mai earlier said the party would propose recount legislation today and make the new law retroactive.

``They're delay the recounting because they're doing something very ugly,'' said Justin Chou, assistant director- general of the Nationalist Party. ``They're playing dirty games. They're afraid and they need something to be covered up.''

Chen Shui-bian beat Nationalist candidate Lien Chan by 30,000 of 13 million votes cast. The number of invalidated votes was 10 times greater than the victory gap. Thousands of protesters have been on the streets since the poll. The Nationalist Party says Chen hijacked the election by faking an assassination attempt 24 hours before the vote.

The benchmark TWSE stock index was down 1.3% at 12:15 a.m. in Taipei after falling by as much as 5.3 percent earlier today. It's the market's worst decline in eight years. The Taiwan dollar was up 0.08 percent after falling by a similar about 0.1 percent before the news of a possible recount.

``The government is starting to show goodwill, so as long as the legislators can proceed with amending the law and quickly conduct the vote recount, it will be positive,'' said Parker Wu, who helps manage the equivalent of $3.2 billion of mutual funds as a fund manager at Shinkong Investment Trust Co. in Taipei.

The High Court said yesterday it might take six months to rule on a recount. Nationalist Party protesters demanding an immediate recount swelled to what Apple Daily estimated at 50,000 people last night. The Nationalists said they are expecting as many as 500,000 in islandwide demonstrations planned for Saturday.

The protests have been fanned by a belief among many Nationalist Party supporters that Chen tipped the election by staging an assassination attempt to elicit sympathy votes. The government has refused a call by Lien for an outside investigation of the shooting incident, in which Chen Shui-bian and Vice President Annette Lu suffered flesh wounds from gunshots during a motorcade in the city of Tainan on Friday.

To contact the reporter on this story: George Hsu in Taipei at georgehsu@bloomberg.net

Last Updated: March 22, 2004 23:23 EST