TAIPEI, Sept 7 (Reuter) - Taiwan has given its approval to the setting up of a local representative office for Tibet's exiled spiritual leader the Dalai Lama, the United Daily News reported on Sunday.

The office, with donations of T$30 million (US$1.05 million) from local Buddhist associations, would function as a channel between Taiwan and Tibet's exiled government, the paper said.

Taiwan officials were not available for comment.

China has reacted angrily to any suggestion of a united front between Taipei, which it suspects of wanting to declare formal independence, and the Dalai Lama, whom it accuses of fomenting separatist dissent in Tibet.

The Dalai Lama, who fled into exile in India after an abortive uprising against Beijing rule in 1959, says harsh government and Chinese immigration are eroding Tibet's ethnic majority and culture but that he hopes only for genuine autonomy in the remote mountain region.

In March, the Dalai Lama made an unprecedented visit to Taiwan, which China views as a rebel province.