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Car-booking app Uber could be banned in Taiwan, after state officials claimed the company did not operate lawfully within the island.

On Wednesday, treasury authorities said Uber's licence could be revoked because it was registered as a software company, not as a taxi service.

But hours later, the Executive Yuan government said it wanted to discuss options with Uber.

The California-based company said it would welcome the discussion.

"We thank the Executive Yuan for demonstrating leadership and willingness to open a meaningful dialogue," the company told the Â鶹ԼÅÄ.

Uber, which connects drivers to passengers through their smartphones, was initially told it had to wait until 11 August to discover whether the service would be banned.

But later on Wednesday the government announced it would hold a meeting next week to discuss possible amendments of existing laws to keep Uber in Taiwan.

"Uber is not legal under our existing laws and regulations," said Tong Zhenyuan, a spokesman of the Executive Yuan, as quoted by local press agency CNA.

"The government will take a comprehensive review and come up with a relevant policy and establish a system of fair competition," he said.

Some Uber drivers in Taiwan have had their individual operating licences suspended, according to reports.

And they could now be fined 50,000 Taiwan new dollars (£1,180) each time they are caught working for the company.

Taiwan's transport ministry says it has already fined Uber drivers a total of 65m Taiwan new dollars.

At the heart of the issue is the question of whether Uber is a software or transportation company.

"They are registered as an information services provider, but what they're doing is actually transportation," said Taiwan transport ministry spokesman Lin Kuo-hsien.

The difference between those two business types, he said, determined whether taxi passengers were legally protected when riding in an Uber vehicle.

If the government presses ahead with a ban, Uber will have the chance to appeal.

"Uber is committed to Taiwan and to the tens of thousands of Taiwanese riders and drivers who rely on Uber every day," a Uber representative told the Â鶹ԼÅÄ.

The potential ban in Taiwan comes two months after a court in France fined Uber for running what it deemed .

In July, Uber ceased operations in Hungary after state officials blocked internet access to the app, referring to it as an "illegal dispatcher service".

Uber was founded in 2009 and says it now operates in more than 500 cities around the world.

More than two billion journeys have been made using the app.

Rival car-hailing app Lyft - up 12% on June.