Chen's DPP was still parliament's biggest party with 89 seats, but the party was no match for the Nationalist and People First parties, who for the past four years have teamed up to block the president's policies and whose supporters include many mainlanders who fled communist China.
Chen's resignation might affect relations with China, the island's neighbor that considers the self-ruled island part of Chinese territory. Beijing has refused to talk to Chen until he agrees that Taiwan belongs to China - a demand he has repeatedly rejected.