Taipei, Jun 13 (IANS): Taiwan on Tuesday slammed Panama after it established diplomatic relations with China and cut ties with Taipei, accusing Beijing of using "money diplomacy" to sway the island nation.

Foreign Minister David Lee told the media that Taiwan expressed "anger and regret" over the Monday night move, and will sever diplomatic ties with Panama and terminate all cooperation projects, reports Efe news.

Lee accused China of using "money diplomacy" to influence Panama in cutting ties with the island nation in favour of closer relations with Beijing, adding that the move amounted to an offence to the Taiwanese people.

He also accused Panama of cheating Taiwan by not telling Taipei about its intention to open ties with Beijing, calling it "very unfriendly".

The Presidential Office also held a news conference to denounce Panama and China.

Joseph Wu, secretary-general to the President, said the development would force the Taiwan government to re-assess cross-Strait ties.

"Taiwan is willing to help our allies in economic development, but we do not want to join in the race for money diplomacy," he said, hinting that China had paid huge sums of cash in an effort to distance Panama from Taiwan.

Panama's termination of bilateral relations with Taiwan means there are only 20 countries that recognise Taiwan.