The switch will allow the outgoing prime minister, Lien Chan, who is also deputy president, to spend more time repairing his low public ratings ahead of presidential elections due in 2000, when he is likely to emerge as the KMT's candidate. Mr Lee has said he will not stand again and has been grooming Mr Lien as his successor.
Mr Siew, 58, will take up his post on 1 September after next week's KMT annual party congress approves the appointment. He will be the first Taiwan-born prime minister since the KMT fled to Taiwan in 1949, and also the first prime minister to have been popularly elected to the legislature. Mr Siew (pronounced Shao) led Taiwan's Mainland Affairs Council in 1994- 5 and last year he ran Mr Lee's successful campaign in the presidential elections.
Earlier yesterday, Mr Lien and his whole cabinet tendered their resignations to make way for the expected cabinet reshuffle. Mr Lien, 60, had wanted to give up the prime ministership when he was elected deputy president last year, and again offered to resign earlier this year after a spate of high-profile murders and kidnappings resulted in public demonstrations of 50,000 protesters against the government's inability to deal with crime. Most grisly was the kidnapping and murder of a television celebrity's 17-year-old daughter, Pai Hsiao-yen, whose body was found naked in a drain.
Fighting crime will remain high on the agenda for the new government, especially after a gun battle in Taipei this week when one of Ms Pai's kidnappers was killed, but two managed to escape a massive police cordon. Last week Taiwan's top police officer, the National Police Administration director Yao Kao-chiao resigned after the same gang abducted and tortured a local businessman.
Mr Siew's experience on mainland affairs will stand him in good stead for further wrangles with Peking as China becomes more aggressive about wanting a timetable for reunification. This week Peking dismissed an offer from Taipei to reopen talks, which have been suspended for two years.