XML help!

I am trying to maintain my carriage returns.
The data is inside a tag (XML) as follows:
<tag>
line1
line2
line3
</tag>

I want to keep the formatting of the data (in the 3 lines) as it is but it goes like this:
line1 line2 line3

How to maintain the formatting?

EDIT: tried using:
<xsl:preserve-space elements="*"/> and <xsl:preserve-space
> elements=“cell”/>
but this does not work :expressionless: