Taipei (AFP) - One engine failed on the TransAsia plane that crashed in Taiwan this week with the loss of at least 35 lives, and the pilots may have inexplicably shut down the other, investigators and experts said Friday.

Initial findings from the plane's black boxes were released as reports emerged that the chief pilot was still clutching the joystick when his body was found in the cockpit, after he apparently battled to avoid populated areas.

The Civil Aeronautics Administration (CAA) also disclosed that TransAsia Airways had failed to meet around a third of the regulatory requirements imposed after another fatal crash just seven months ago in Taiwan's western Penghu islands.

On Wednesday the French-made ATR 72-600 plane, equipped with two Pratt & Whitney turboprop engines, plummeted into a river after clipping an elevated road, as shown in dramatic dashcam footage.

In the first account of the last moments of Flight GE235, Taiwan's Aviation Safety Council said the right engine had "flamed out" about two minutes after takeoff from an airport in northern Taipei.

Warning signals blared in the cockpit and the left engine was then shut down manually by the crew, for unknown reasons, the council's director Thomas Wang told a news conference.

"The pilot tried to restart the engines but to no avail. That means that during the flight's final moments, neither engine had any thrust," he said. "We heard 'Mayday' at 10:54:35."

Wang said it was "not clear" why the left engine was shut down manually. "We are not reaching any judgement yet," he said.

- Probable error -

But analysts said it was probable the crew made an error.

"It looks like they shut the wrong engine," said Greg Waldron, the Singapore-based Asia managing editor at aviation industry publication Flightglobal.

"The right-side engine flamed out but that in itself is not enough to cause a crash because the ATR is designed to fly on one engine," he noted.

"What happened was that a few seconds after engine two flamed out, they (the pilots) cut the fuel to engine one, and when they cut fuel to engine one that's when things started to go haywire because the plane was not powered anymore."

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Such a hypothesis recalls the 1989 crash of a British Midland Boeing 737-400, which came down on a motorway in central England when the pilots shut down a functioning engine instead of a defective one. Forty-seven people were killed.

Gerry Soejatman, a Jakarta-based independent aviation analyst, said the Taiwan incident "could have been an innocent mistake".

"I will have to take a look again but changes in the layout of the engine instrumentation of the aircraft (compared with an older version of the ATR 72) could be a factor," he said.

TransAsia said late Friday all its 71 ATR pilots would be required to sit a CAA test to ensure they were properly qualified.

The airline said it had also decided to conduct a year-long review of the company, to be carried out by "an authoritative international team".

- Startling images -

Taiwan authorities said the year-old plane had also developed a problem with an engine during its delivery flight from manufacturer ATR, from the French city of Toulouse to Macau, en route to Taiwan.

The TransAsia plane crashed shortly after take-off on a domestic flight to an outlying island. The startling footage showed it hitting the road as it banked steeply away from buildings and into the Keelung River.

Pilot Liao Chien-tsung has been hailed as a hero for apparently making a desperate attempt to steer the plane, with 53 passengers and five crew on board, away from built-up areas during its steep descent.

His body was found in the cockpit still holding the joystick with both hands, and with his legs badly fractured, according to the China Times.

"He disregarded his own life. He sacrificed it," Liao's sobbing mother told reporters.

Vice President Wu Den-yih also praised Liao as he visited a funeral parlour where crash victims were taken.

"The pilot gripped the joystick tightly and was trying to control the airplane right up to the very last moment so as to avoid hitting city residents," Wu said.

Fifteen people survived the crash, and rescuers are still searching the river and submerged wreckage for another eight who remain missing.

The CAA has grounded a total of 22 ATR planes from two Taiwanese airlines for safety checks following the accident, and TransAsia has been banned from applying for new routes for one year.

Wednesday's incident came just seven months after another TransAsia ATR crashed during a storm, killing 48 people.

Calls are mounting from lawmakers for a total suspension of TransAsia's operations.

Clark Lin, chief of the CAA's Flight Standard Division, said so far the airline "had failed to match around one-third of the requirements" laid down by the regulator after the July crash.