The vote, introduced by Beijing ally Nicaragua, represented a bid by the two countries to “undermine democracy” in the region, Taipei said.

The Central American Parliament (Parlacen) is a political body representing six countries in the region – which has emerged as a battleground for influence between Taiwan and China.

Beijing regards democratic Taiwan as part of China, and opposes other countries’ official exchanges with the island as well as its participation in international organisations.

On Monday, Parlacen passed a proposal by Nicaragua to remove Taiwan as a permanent observer and replace it with China.

Taiwan’s foreign ministry said in response that it would withdraw from the body to “safeguard our national sovereignty and dignity”.

“The dictatorship of Daniel Ortega in Nicaragua is willing to become a pawn of China… to manipulate the fallacy of the so-called ‘one-China principle’ and seize our rights in the Parlacen,” it said in a statement Tuesday.

The move also “highlights China’s intention to undermine democracy in Central America and its ambition to expand in the region”.

The Parlacen decision marks Taiwan’s latest diplomatic setback after Honduras severed official relations with the island to recognise China in March.

Since Taiwanese president Tsai Ing-wen came to power in 2016, Beijing has ramped up military pressure and poached nine of Taipei’s diplomatic allies – including Nicaragua, which cut official ties in 2021.

Within Parlacen, Guatemala is the only member that still recognises Taiwan.

The Parlacen removal came days after Taiwanese vice-president Lai Ching-te returned from a visit to Paraguay with two stopovers in the US – transits that angered Beijing.

China staged military drills on Saturday around the island, a day after Lai’s return to Taipei, and on Monday slapped a ban on the island’s mango imports.