TAIPEI, Dec 10 (AFP) - Taiwan on Tuesday set up its first cabinet-level commission to protect the rights of indigenous people who have lived here since mainland Chinese settled on the island more than 300 years ago.

The formation of the organization coincided with the formal establishment of the extreme Taiwan Independence Party (TAIP) which staged a large-scale march and other activities in southern Kaohsiung city, to mark International Human Rights Day.

Taiwanese President Lee Teng-hui described the formation of the Indigenous Affairs Commission as a "milestone with historical significance, which not only demonstrates the government's desire to ensure the well-being of indigenous people, but also symbolizes a new phase of development in administration of aboriginal affairs."

Taiwan has more than 350,000 aborigines, whose ancestors were driven to mountainous and deserted areas after mainland Chinese settled here.

Many aborigines live in poverty and are poorly educated. Prostitution is rife, with some daughters sold into the flesh trade by poor and poorly-educated parents.

The government already has a Mongolian and Tibetan Affairs Commission to take care of the interests of those minority groups, but, until Tuesday it did not have a cabinet-level body to protect the rights of aborigines.

The aboriginal population is 300 times larger than that of Tibetans and Mongolians in Taiwan.

The opposition Taiwan Indigenous People Rights Promotion Association said Tuesday they would closely monitor the work of the commission to see if it helps to improve the living standards of aborigines.

Meanwhile, the TAIP staged a series of activities in Kaohsiung Tuesday marking the establishment of the pro-independence group.

"We chose Kaohsiung to hold our establishment ceremony because it is the base for the opposition to fight for democracy and human rights," said Stephen Lee, secretary-general of the TAIP.

On December 10 1979, defying martial law, the opposition held its first large-scale march in Kaohsiung to observe International Human Rights Day. The event turned into a riot and led to the arrest and imprisonment of several key dissidents.

"We formed the party to promote our goal of turning Taiwan into an independent state," Lee said, adding that the opposition Democratic Progressive Party (DPP) had lost its early ideal of campaigning for independence to become a power-seeking group.

China, which has viewed Taiwan as a rebel province since the end of a civil war in 1949, has warned that if the island formally breaks from the mainland, it will attack Taiwan.