By Idrees Ali

WASHINGTON (Reuters) - A senior official of Taiwan's independence-leaning Democratic Progressive Party said on Tuesday it would propose legislation to have greater transparency in relations with mainland China, which he said will be a priority for the recently victorious party.

"We will, in a new session of the legislature, put forward the Cross-Strait Agreement Oversight legislation as a priority to highlight our interest in peaceful and stable relations with China," Joseph Wu, the DPP's secretary general, said in a speech at a Washington think tank.

Tsai Ing-wen and her Democratic Progressive Party won a victory in both presidential and parliamentary elections last week, in what could usher in a new round of instability with China, which claims self-ruled Taiwan as its own.

She risks antagonizing China if she attempts to forcefully assert Taiwan's sovereignty and reverses eight years of warming China ties under incumbent President Ma Ying-jeou of the Nationalists.

Wu said in order for people in Taiwan to understand any engagement with mainland China, "we need to handle it in a more transparent way and we also need to have some guiding principles or rules and norms."

China has deployed more than 1,000 short- and medium-range ballistic missiles as well as cruise missiles in coastal areas facing the Taiwan Strait, according to Taiwan's defense ministry.

Wu added that building trust between mainland China and Taiwan would be a "step by step" process.

In an interview with Reuters later, Wu said the DPP would "find a mechanism" to work with Taiwan's Nationalists "on some pressing issues" but did not plan to create a shadow cabinet before Tsai is sworn in on May 20.

"We want to ensure that the transition is a smooth one, we want to work with the outgoing government so that the political conditions can be stable in Taiwan," Wu said.

'ENCOURAGEMENT' FROM U.S.

Wu said the party was keen on expanding relations with the United States, including potentially joining the Trans-Pacific Partnership trade agreement. It looks for Washington to encourage Beijing to work with Taiwan.

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"That kind of encouragement is going to be very helpful. It helped before and I think it should help (again)," he said.

The United States has expressed concerns about the danger of worsening China-Taiwan ties at a time when China's navy is increasingly flexing its muscles in the South China and East China seas.

(Story refiled to correct to Reuters style for English name of Taiwan party in paragraph 8 to Nationalists, not Kuomintang)

(Editing by Matthew Lewis)