BEIJINGcTypeface:> After months of negotiation, Taiwan and China have "reached an agreement” on how to respond to the deaths of two Chinese fishermen following a sea chase by Taiwan’s coastguard, Taipei said.

The settlement involves compensation to the victims’ families and the repatriation of their bodies to China, according to reports. Taiwan’s coastguard declined to share details.

The deal may reduce tensions in the sensitive Taiwan Strait, which Beijing claims as its own.

China had condemned the incident in February as "malicious” and started regular patrols around Taiwan’s Kinmen archipelago following it.

The regular patrols aimed to "maintain operational order in sea areas and safeguard fishermen’s lives and property”, Beijing’s coastguard said in February.

The two men who died were among four people on board a fishing boat which trespassed into Taiwanese waters off Kinmen on 14 February and resisted inspection.

The boat capsized when Taiwanese authorities gave chase and the two fishermen drowned while trying to flee. (Agencies)