The agents, based in Beijing and Shanghai, were recruited by the Kuomintang (KMT) party to spy on China in the 1980s and were arrested after the 1989 Tiananmen crackdown, said the Taipei-based China Times.

They were later sentenced to prison terms ranging from three to 18 years, the paper said.

A former agent, identified only by his surname Tang, was quoted by the paper as saying that he was recruited by the KMT while he was an engineer stationed in Iraq.

Tang, who filed the lawsuit in the Taipei district court on behalf of the group, said the KMT promised "hefty compensation" in the event of their arrests but had abandoned them after they were caught, the report said.

The court rejected the KMT's arguments that the agents were working for the Taiwan government and therefore the compensation should come from state coffers, it said.

Court officials were not immediately available for comment.

Taiwan and China have spied on each other since they split in 1949 when the nationalist KMT lost a civil war on the mainland to the communists and fled to Taiwan to set up a separate government.

But Beijing still regards the island as part of its territory awaiting reunification, if necessary by force.

Last month, a Taiwanese army major general was arrested on charges of spying for China, while a retired local agent alleged that at least 10 Chinese moles are believed to have infiltrated Taiwan's security units.

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