BEIJING (REUTERS) - The Vatican may send a delegation to China before the end of this month and if the meeting goes well the two could reach an agreement on the appointment of bishops, a widely read Chinese state-run newspaper said on Tuesday (Sept 18).

The Vatican and China are in advanced talks to resolve a dispute over the appointment of bishops in China, one of the biggest obstacles to resuming diplomatic ties that were cut almost 70 years ago.

China's estimated 12 million Catholics are split between an underground Church that swears loyalty to the Vatican and the state-supervised Catholic Patriotic Association.

China's Global Times newspaper, published by the ruling Communist Party's official People's Daily, said there were no "disputes on issues of principle" between the two.

Since the previous meeting was held at the Vatican, the Vatican delegation would come to China this time for a meeting late September and "if the meeting goes well, the agreement would be signed", the paper cited, citing an unidentified source.

The talks have been controversial within the Catholic church.

The most outspoken critic of the pope's China strategy has been Cardinal Joseph Zen, a former bishop of Hong Kong, who has said the direction of negotiations suggests the Vatican is preparing to sell out the underground church.

China maintains a tight grip on religious groups, despite the government professing to guarantee freedom of belief.

Last month, Beijing's seniormost official for religion wrote that religious matters in China cannot be controlled by foreigners.

Another issue to be resolved is self-ruled Taiwan, which China claims as a wayward province and with which the Vatican maintains formal diplomatic ties.

While restoring diplomatic relations were not part of the ongoing talks, full relations would give the church a legal framework to look after all of China's estimated 12 million Catholics and move on to focus on Catholic growth in a country where Protestant churches are already growing fast.