The electoral setback of Taiwan's ruling Kuomintang (KMT) in Saturday's local elections may pose a new challenge to its Chinese mainland-friendly leader Ma Ying-jeou as well as cross-Straits relations, experts warned yesterday.

Seventeen counties and cities were up for grabs in Saturday's poll, and Ma's KMT lost control of two, while the pro-independence opposition Democratic Progressive Party (DPP) gained one.

"It is definitely bad news for the mainland," said Li Jiaquan, a senior researcher with the Institute of Taiwan Studies at the Chinese Academy of Social Sciences.

He expected more of a power struggle between the KMT and DPP on major political issues, ranging from bilateral talks to the proposed trade pact across the Straits.

Ma and his government will likely face more obstacles if he continues his push for closer ties with the mainland, the Taipei-based United Daily newspaper said in a commentary yesterday.

Speaking to reporters in Taipei on Saturday, DPP Chairwoman Tsai Ing-wen called the results "an important step in the DPP's comeback", saying they also show people are not happy with the government.

The DPP took more than 45 percent of the vote, compared to 38 percent in the magistrate and mayoral polls four years ago.

"The outcome is not as good as we'd hoped," said Ma, who also acts KMT chairman.

He promised to improve the government's performance and reflect on the warnings delivered by the electorate.

But Ma insisted his positive cross-Straits policies are welcome by most Taiwan people.

The DPP, however, got a boost in its morale, and DPP's Tsai, a possible candidate for the island's "presidential" elections in 2012, is putting more pressure on Ma.

Tsai interpreted the poll as a resounding rejection of Ma's policies, which center on improved relations with the mainland, AFP reported.

Li Jiaquan said it is still difficult to evaluate how Ma will adjust his cross-Straits policy.

"If he links the KMT's electoral setback with the mainland policy, there is only a slim chance for him to open political talks with the mainland."

Ma was seen a favorable figure by the Chinese mainland because of his promotion of positive cross-Straits ties, which froze up during the DPP's rule of Taiwan from 2000 to 2008. He also once enjoyed a high support rate with his incorruptible character and refreshing image. Ma had an approval rating of 66 percent when he took office in May 2008, and polled 52 percent on his first anniversary.

But challenges keep popping up as the financial crisis loomed over Taiwan and a serious typhoon hit the island in August.

George Tsai, a political scientist at Taipei's Chinese Culture University, was quoted by AFP as saying "this is a warning sign for Ma that he has been stereotyped as incompetent following the financial and typhoon crises".

Ma will become more cautious and conservative if he interprets the people's dissatisfaction as mistrust of his mainland policies, Tsai said.