(Adds China comment, paragraphs 8-9)

By Ralph Jennings

TAIPEI, Oct 7 (Reuters) - Taiwan legislators wearing surgical masks and displaying skull-and-crossbones banners took over parliament's floor on Tuesday after the island's security chief accused China of starting the global SARS epidemic six years ago as part of a biological warfare campaign.

Taiwan National Security Bureau Director-General Tsai Chao-ming told a legislative committee on Monday that sources in China suspected biological warfare, but that conclusive evidence had not surfaced.

Severe Acute Respiratory Syndrome originated in southern China in 2002 and went on to kill hundreds of people around the world -- including about 350 in China -- bringing Asian tourism and air industries almost to a halt.

An initial cover-up of the epidemic led to the sacking of Beijing's mayor and the health minister, and also scores of conspiracy theories about the origin of the virus.

"In the 2003 SARS period, there were deaths and injuries, and in addition China hid the patient count, causing panic in people's hearts," the security bureau said in a statement.

"At that time insider information indicated that SARS was a biological weapon."

"BIOLOGICAL WARFARE"

Tsai told the committee that SARS had "become a biological warfare formula" in China and that the bureau would "continue to monitor the situation", local media said on Tuesday, splashing the story across TV screens and front pages.

Asked about the reports, a Chinese Foreign Ministry spokesman said he had not heard of them but dismissed them immediately.

"These are completely groundless and irresponsible comments," Qin Gang told a news conference. "Could you help me find the original source so we can find the scoundrel who spread them?"

China has claimed sovereignty over self-ruled Taiwan since the end of the Chinese civil war in 1949. Beijing has vowed to bring the island back under mainland rule, by force if necessary.

Some Taiwan legislators were unsure why the security bureau brought SARS up at such a crucial time in cross-strait relations, which have improved under the presidency of Ma Ying-jeou.

"The comment about biological warfare from China brings SARS back as a hot topic," the United Daily News said. "It raises questions about whether President Ma Ying-jeou's government can build citizen trust in its administrative ability."

A conspiracy was "impossible", said legislator Shuai Hua-ming.

"With biological warfare, you need to get the definition straight," Shuai said. "Warfare needs a goal, an object. China had no clear goal. It wasn't an operative weapons system."

Conspiracy theories about SARS have appeared before. After two Russian scientists said that SARS could have been manufactured in labs, Chinese activists pointed to the United States, saying Washington might be using it against China. (Additional reporting by Emma Graham-Harrison and Yu Le in Beijing; Editing by Nick Macfie and David Fox)

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